UPDATE, 8/13/12, 10:30 a.m. EDT: Attorneys from Weil’s Washington, D.C. office also advised Advent on the acquisition of AOT Bedding Super Holdings. That information has been added in the article’s twelfth paragraph.
DEALMAKER
Marilyn French, 46, a corporate partner in the Boston office of Weil, Gotshal & Manges.
THE CLIENT
Boston-based private equity firm Advent International.
THE DEAL
Advent said Sunday that it will purchase a majority stake in AOT Bedding Super Holdings, the parent company of mattress-makers Serta and Simmons.
THE DETAILS
Financial terms of the transaction were not disclosed, but Advent is reportedly paying roughly $3 billion, according to The New York Times, which cited an anonymous source. (French declined to comment on the deal’s terms.) Current investors Ares Management and the Ontario Teachers’ Pension Plan (OTPP) are selling the chunk of AOT being acquired by Advent in the transaction, but each will retain “a significant equity stake” in the company, according to Advent’s announcement of the deal.
The size of Advent’s stake was also not disclosed. The deal is expected to close in the fourth quarter.
THE BIG PICTURE
The Chicago Tribune reports that the deal would instantly make Advent the country’s largest mattress manufacturer, as Serta and Simmons are responsible for a combined 30 percent of all U.S. mattress sales. While the mattress market has not yet seen its revenues return to prerecession levels, Advent nonetheless faced plenty of competition for the stake. The New York Times notes that the buyer outbid rivals including Berkshire Partners and Bain Capital in the auction process that led to the acquisition.
The deal comes just two years after Ares and OTPP bought Simmons out of bankruptcy from Thomas H. Lee Partners for $760 millionand seven years after the duo acquired Serta. The 2010 sale of Simmons marked the seventh time the mattress company had changed hands during a nearly 20-year period, as a string of buyout firms managed to turn a profit from Simmons even as it sunk deeper into debt, the Times previously reported.
THE BACKSTORY
Weil is a longtime outside counsel to Advent, with the relationship getting its start in the law firm’s London office before drawing in Boston-based attorneys. James Westra, former head of Weil’s Boston office and cohead of its private equity practice, advised Advent for several years before joining the private equity firm as its chief legal officer last year.
French says her own relationship with Advent dates to 2006, when she worked on the private equity shop’s takeover of a chemicals unit formerly owned by Celanese Corporation. Since then, she has advised Advent on several deals, including this year’s $3 billion acquisition (with GS Capital Partners) of consumer credit reporter TransUnion Corp. Over the past few years, French says, Advent has kept the firm very busy “working on a number of their transactions, doing everything in the retail, energy, financial services industry.”
ON CLOSING
Familiarity was the key to moving quickly through the deal’s auction process to getting an agreement signed, French says.
In addition to her history of working on Advent transactions, French has also worked closely with some of the parties on the other side of the table. French advised THL on its 2003 acquisition of Simmons, and also handled Simmons’s sale out of bankruptcy to Ares and OTPP. As a result, she had a good relationship with Simmons general counsel Kristen McGuffey, who was leading the in-house team on the target company’s side of the matter.
Advent had been eyeing a stake in AOT for some time, French says, but didn’t get Weil involved in the mattress-shopping plans until the beginning of July. At that point, French put together a Weil team that included attorneys in Boston, Dallas, New York, Silicon Valley, and Washington, D.C., and spent the rest of the month performing due diligence on the target and preparing a bid for the auction process. “We started really digging in the first week of July, with the final bids due July 30,” French says.
French says that she and her team learned on July 31 that Advent had made the auction’s final round and that the firm had until the next day, August 1, to present its client’s final offer: “We huddled with Advent . . . to do a redraft of the merger agreement to give the best position that we could give while still, obviously, protecting Advent.”
Once that offer was accepted, French says, the negotiating parties quickly moved toward the signing that took place on Saturday, August 4, the day before the deal was announced to the public. “Auctions are always very quick,” she says. “But this was really a good feat to get from submitting final bids to signing a deal in a week time frame.”
Having a history with lawyers on both sides of the deal definitely gave French’s team an edge, she says: ”We just understood the industrywhat the hot-button issues are. . . . I think it was helpful just in understanding what we needed to focus on, what we needed to look at.”
