From Home Furnishing Business
Mattress Firm Secures New $225 Million Credit Line
Mattress Firm, whose parent company, Steinhoff International, has been struggling in the wake of an accounting scandal, said it has obtained a new secured asset-based revolving credit line of up to $225 million.
The retailer said the new credit facility will be available for working capital needs and other general corporate purposes. It has an initial principal availability of $75 million, but the company said it intends to upsize the facility in increments to boost the total principal amount to $225 million.
“This new credit facility provides independent liquidity and capital to support our strategy, and demonstrates the strength of our business, the value of our assets and the quality of our brands,” said Ken Murphy, Mattress Firm’s president and CEO. “Over the past year we have made multiple strategic investments that position us to build on our long-term vision to become the largest U.S. vertically integrated mattress retailer.”
“These investments included accelerating our national rebranding to the Mattress Firm banner, adjusting our merchandise offering to offer better value to consumers, and improving our organizational structure. With these initiatives behind us we are excited about the long-term profitable growth opportunities for our business,” he added.
Barclays acted as administrative agent, sole book runner and sole lead arranger on the credit facility. Sidley Austin LLP acted as legal counsel to Mattress Firm in connection with the financing, while Paul Hastings LLP acted as legal counsel to Barclays.
Steinhoff, a South Africa-based furniture retailer and manufacturer, acquired Mattress Firm in 2016. Its chairman and president both resigned earlier this month after the company said it had discovered “accounting irregularities.” The company indefinitely postponed the release of its fiscal 2017 earnings and said it may have to restate fiscal 2016 earnings.
Steinhoff’s stock price has fallen more than 80% on the Frankfurt Stock Exchange since the accounting scandal was disclosed.