A group of banks led by Wells Fargo & Co launched a US$1.6 billion delayed-draw term loan to help fund Tempur Sealy International’s acquisition of Mattress Firm Group, according to a person familiar with the matter, as the Federal Trade Commission is moving to block the deal.
A lender call will be held Monday (Sep 23), the person said, asking not to be named because the information is private. Commitments are due Oct 3, and price talk has yet to be announced, they added.
Representatives for Tempur Sealy, Wells Fargo and Mattress Firm did not immediately respond to a request for comment.
The FTC sued in July to block the acquisition, valued at US$4 billion. Tempur Sealy “will have the ability and incentive to suppress competition and raise prices for mattresses for millions of consumers” if it acquires Mattress Firm, the agency alleged in its complaint.
The debt deal would mark the largest delayed-draw term loan since 2021, according to data compiled by Bloomberg, when federal contractor Peraton sold an almost US$3.8 billion term loan. With a delayed-draw feature, a borrower has access to a loan’s full amount when the deal closes, but can choose to borrow the money at a later date.
Other companies have tapped debt markets for money while deals await regulatory approval or appeals. Last month, grocery chain Kroger sold US$10.5 billion of notes to fund its acquisition of Albertsons, which has also been a target of the FTC and the state of Colorado. BLOOMBERG
