Tempur Sealy to provide DIP financing to Innovative Mattress Solutions
Tempur Sealy 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. The company has agreed to provide up to $14M 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 December 31, 2018, iMS represented less than 2% of the company's global net sales. As a result of the iMS bankruptcy, the company will record a charge of approximately $21M 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.