Sealy Corporation Announces Pricing of Notes and Execution of Other Financing Plan Documentation

TRINITY, N.C., May 15 /PRNewswire-FirstCall/ -- Sealy Corporation (NYSE: ZZ) announced today that its subsidiary, Sealy Mattress Company (the "Company"), priced $350.0 million aggregate principal amount of 10-7/8% senior secured notes due 2016 (the "Notes") in a private placement, with gross proceeds of $335,916,000. The Company also entered into a new asset-based revolving credit facility (the "ABL Revolver") with undrawn commitments thereunder of $100.0 million. In addition, the Company and Sealy Corporation entered into a forward purchase contract with Sealy Holding LLC, Sealy Corporation's controlling stockholder and an affiliate of Kohlberg Kravis Roberts & Co. L.P., pursuant to which Sealy Holding LLC will provide a forward commitment to purchase its pro rata portion of convertible notes in the previously announced rights offering and to acquire any convertible notes that other shareholders do not purchase. The closing of the Notes offering, and the effectiveness of both the ABL Revolver and the forward purchase contract, are expected to occur on May 29, 2009.

The Company intends to use the net proceeds from the offering of the Notes and the cash posted under the forward purchase contract to repay amounts outstanding under its existing senior secured credit facilities, thereby terminating those facilities, and for general corporate purposes.

The Notes will be offered within the United States only to "qualified institutional buyers" pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Notes will also be offered outside the United States to non-U.S. investors. The Notes will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This announcement does not constitute an offer to sell or the solicitation of an offer to buy such Notes in any jurisdiction in which such an offer or sale would be unlawful.

About Sealy

Sealy is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. Sealy is also a leading supplier to the hospitality industry. For more information, please visit www.sealy.com.

This document contains forward-looking statements within the meaning of the safe harbor provisions of the Securities Litigation Reform Act of 1995. Terms such as "expect," "believe," "continue," and "grow," as well as similar comments, are forward-looking in nature. Although the Company believes its growth plans are based upon reasonable assumptions, it can give no assurances that such expectations can be attained. Factors that could cause actual results to differ materially from the Company's expectations include: general business and economic conditions, competitive factors, raw materials purchasing, and fluctuations in demand. Please refer to the Company's Securities and Exchange Commission filings for further information.

SOURCE Sealy Corporation