TSI agrees to DIP financing for Innovative Mattress Solutions

Time：2019-01-16 13:01:24    Share：

Tempur Sealy International has agreed, subject to bankruptcy court approval, to provide debtor-in-possession financing to Innovative Mattress Solutions in connection with IMS' Chapter 11 bankruptcy filing, TSI officials said.

Tempur Sealy said it has agreed to provide up to $14 million in DIP financing to facilitate IMS' bankruptcy process, which IMS has indicated will include optimizing its portfolio of retail locations and is anticipated to be completed during the first half of 2019.

IMS operates 142 specialty sleep retail locations primarily in the southeastern U.S. under the names Sleep Outfitters, Mattress Warehouse and Mattress King.

For the year ended Dec. 31, IMS represented less than 2% of Tempur Sealy’s global net sales. As a result of the IMS bankruptcy, the company will record a charge of approximately $21 million during the fourth quarter of 2018 to fully reserve this account, which will be excluded from adjusted EBITDA as a pro forma adjustment under the company's senior secured credit agreement, officials said.

"Innovative Mattress Solutions has served over a million consumers and built equity for their and our brands in their markets,” said Tempur Sealy International Chairman and CEO Scott Thompson. “However, we believe IMS' overextended retail footprint and thin capital structure were not designed to effectively respond to the competitive pressures of the recent retail environment. This caused the unexpected need for bankruptcy protection. We will review strategic alternatives related to IMS during its bankruptcy process with a focus on what is best for Tempur Sealy consumers in the affected markets."

Added Kim Knopf, CEO of IMS: “Our stores are open for business as usual, and we are focused on taking care of our valued customers. IMS now has the backing of Tempur Sealy, one of the biggest and best-known mattress manufacturers, and a longtime supplier partner of our company. We look forward to emerging from this process as an innovative, customer-focused company positioned for profitable operation.“