UPDATE: International Bedding Corp. says it's for sale
Clint Engel -- Furniture Today, October 27, 2011
FORT LAUDERDALE, Fla. — International Bedding Corp. says it is pursuing a sale of the business or other financing options.
In a letter filed with a state agency in Indiana, where it has a plant, IBC's CEO, Jeff Maillet, said the company may have to shut down if an agreement isn't reached in about 60 days.
But in a press release, the company downplayed the significance of the Oct. 21 letter, which was filed in conjunction with a notice under the federal Workplace Adjustment and Retraining Notification, or WARN, Act, a requirement that employees be notified if a plant may close.
"Although we do not anticipate any significant changes as part of a sale transaction, it is necessary that we comply with applicable law," Maillet said in a press release.
Dan Hige, IBC president and chief operating officer, said the company is "doing business as usual." He said the company continues to service its customers in a complete and timely manner as it goes through the negotiation process.
"We certainly appreciate our very loyal dealers and vendor base and we will continue to communicate and work with them through this process," he said in the release.
The company has filed WARN notices in all five states where it has production facilities, confirmed Tom Brown, IBC's vice president of human resources.
Maillet said in the Indiana letter that the company is actively negotiating a sale.
In addition to its Fort Lauderdale headquarters and New Haven, Ind., plant, the company has factories in Tolleson, Ariz., Orlando, Fla., Cleburne, Texas, and Barnesville, Pa. IBC employs 560 to 570 people, Brown said.
He said he couldn't comment on who was interested in acquiring the company or define the financing options mentioned in the Indiana letter, but said, "We're optimistic."
In the release, IBC said it retained investment banking advisor Mesirow Financial to assist it in exploring "strategic financial alternatives," including a sale and financing options.
"The weak economy and its impact on key price points that IBC historically services has impacted our ability to generate the increase cash necessary to reduce our debt and fund the growth plans of the company including executing other strategic opportunities which are important to the long term success of IBC," Maillet said in the release.
He also said, "We are encouraged that there are a number of well-capitalized parties exploring this opportunity with IBC."
Brown confirmed a deal would need to be reached within the next 60 days to avoid closure.
In the Indiana letter, Maillet said IBC has been working aggressively on changes, including "adjustment in leadership," workforce cuts and efforts to reduce its debt, but "the ongoing economic downturn has not allowed IBC to realize fully the benefits of these initiatives."
Jeff Golman, vice chairman of Chicago-based Mesirow and head of its investment banking division, said multiple parties have expressed interest in acquiring the company, but wouldn't identify them.
Asked to speak to the likelihood of a sale vs. a closing, Golman said, "Personally, I can't imagine a situation where (ceasing operations) is the case."
"We're working on alternatives that allow the company to recapitalize its balance sheet and position it for growth," he said. "That's what our focus is, and we're confident that's where we're going to end up."
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