Jay McIntosh
Plans to sell 20 million common shares

ARCHDALE, N.C. — A planned stock offering could raise about $350 million for bedding giant Sealy and selling stockholders, according to an updated filing with the Securities and Exchange Commission.

Sealy said it plans to sell 20 million common shares in the initial public offering, with stockholders offering another 3.3 million shares. In addition, selling stockholders may offer as many as 3.5 million additional shares if underwriters sell more than 23.3 million.

The figures were included in the updated registration statement Sealy filed last week. The statement did not say when the offering would take place. Sealy first proposed the IPO last summer, but delayed it because it said market conditions were not right.

Shares would be priced at $14 to $16, according to the filing. If 23.3 million shares were sold at $15, the offering would raise $349.5 million.

After the offering, existing shareholders would still own about 74% of the company. Kohlberg Kravis Roberts & Co., the investment firm that along with Sealy management acquired Sealy in 2004 in a deal valued at $1.5 billion, plans to sell about 2.8 million shares, which would reduce its stake to 59.5% from 80.5%.

Sealy estimates it would receive about $277 million from the offering.

After the sale, the company plans to pay a $125 million special dividend to existing shareholders and $17.3 million in bonuses to its management. It also would pay KKR $11 million to end a management services agreement, and would use about $124.4 million to pay off debt.

The company also said it plans to pay a quarterly stock dividend, initially at an annual rate of about 2% of the price per share, beginning in the third quarter of this year.

Shares would be listed on the New York Stock Exchange under the ticker symbol ZZ.

Underwriters include Citigroup, Goldman Sachs & Co., JPMorgan, Banc of America Securities, Wachovia Securities, Lehman Bros., SunTrust Robinson Humphrey and Ferris Baker Watts.