(Reuters) – Mattress maker Select Comfort Corp (SCSS.O) said it would get $35 million in new financing from private equity firm Sterling Partners, in exchange for a 52.5 percent stake in the company.
Under the deal, Sterling Partners will purchase 50 million common shares for 70 cents per share.
As part of the agreement, the company will reduce the size of its board to nine members and appoint five persons designated by Sterling Partners.
The company also plans to amend its credit agreement to provide for a maximum availability of $70 million.
The bedding industry has been struggling with softer sales in the United States as thrifty shoppers cut discretionary spending. Companies such as Mattress Discounters, Mattress Gallery and Foamex International Inc have even filed for bankruptcy protection.
Select Comfort shares were up 13 cents, or 16 percent, at 93 cents Tuesday morning on Nasdaq. (Reporting by Mihir Dalal in Bangalore; Editing by Ratul Ray Chaudhuri)