The Urethane Blog

Everchem Updates

VOLUME XXI

September 14, 2023

Everchem’s Closers Only Club

Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: read more

ARSENAL COMPLETES SALE OF ELITE COMFORT SOLUTIONS TO LEGGETT & PLATT

 

NEW YORK, January 16, 2019 – Arsenal Capital Partners (“Arsenal”), a leading private equity firm that invests in middle-market specialty industrials and healthcare services companies, today announced that it has completed the previously announced sale of Elite Comfort Solutions, Inc. (“ECS” or the “Company”), to Leggett & Platt (NSYE: LEG) for $1.25 billion.  Leggett & Platt is the leading U.S. manufacturer of bedding components, adjustable beds, bedding industry machinery, automotive seat components, furniture components, flooring underlayment, and high-carbon drawn steel wire.

ECS is a leader in proprietary specialized foam technology primarily for the bedding and furniture industries.  With 16 facilities across the U.S., ECS operates a vertically integrated model, producing specialty foam, developing many of the chemicals and additives used in foam production, and manufacturing private-label finished products.  These innovative specialty foam products include finished mattresses sold through both traditional and online channels, mattress components, mattress toppers and pillows, and furniture foams.  

John Televantos, a Senior Partner of Arsenal, said, “We are pleased with the sale of ECS to Leggett & Platt, a company that is committed to supporting the bedding industry for the long term.  Leggett & Platt is the ideal home for the ECS business and its employees.”  Tim Zappala, a Senior Partner of Arsenal, added, ”We see a significant opportunity for ECS to leverage Leggett & Platt’s reputation and infrastructure and drive continued growth in the bedding and furniture markets.”

”We thank the talented management team of ECS for executing on the vision to build the leading innovative company serving the bedding industry and offering solutions to help the industry grow,” said Roy Seroussi, an Investment Partner of Arsenal. 

Chris Chrisafides, CEO of ECS, said, ”We are grateful to Arsenal for its strategic foresight in creating ECS and the Arsenal team’s significant experience in the polyurethanes sector.  We look forward to continuing the company’s trajectory of innovation and growth under the Leggett & Platt organization.”

About Elite Comfort Solutions

Headquartered in Newnan, Georgia, Elite Comfort Solutions has a national network of 16 facilities throughout the U.S. With its broad and deep industry position, ECS is uniquely qualified to provide e-commerce, retail and OEM customers the most advanced technology solutions in polyurethane foam today. For more information, visit www.elitecomfortsolutions.com.

 

About Arsenal Capital Partners

Established in 2000, Arsenal is a leading private equity firm that specializes in investments in middle-market specialty industrials and healthcare services companies.  Since inception, Arsenal has raised institutional equity investment funds of approximately $3 billion.  Arsenal invests in industry sectors in which the firm has significant prior knowledge and experience and seeks companies typically in the range of $100 – $500 million of initial enterprise value.  The firm works with management teams to build strategically important companies with leading market positions, high growth, and high value-add.  For more information, visit www.arsenalcapital.com.

Tempur Sealy Agrees To Provide Debtor-In-Possession Financing To Innovative Mattress Solutions

|PR Newswire|About: TPX
PR NewswireLEXINGTON, Ky., Jan. 11, 2019 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) (the “Company”) has agreed, subject to bankruptcy court approval, to provide debtor-in-possession (“DIP”) financing to Innovative Mattress Solutions, LLC (“iMS”) in connection with iMS’ Chapter 11 bankruptcy filing. The Company has agreed to provide up to $14 million 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 $21 million 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.

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “Innovative Mattress Solutions has served over a million consumers and built equity for their and our brands in their markets. However, we believe iMS’ overextended retail footprint and thin capital structure were not designed to effectively respond to the competitive pressures of the recent retail environment. This caused the unexpected need for bankruptcy protection. We will review strategic alternatives related to iMS during its bankruptcy process with a focus on what is best for Tempur Sealy consumers in the affected markets.”

Forward-Looking Statements

This press release contains statements that may be characterized as “forward-looking” within the meaning of the federal securities laws, which includes information concerning one or more of the Company’s plans, objectives, goals, strategies, and other information that is not historical information. When used in this release, the words “believes,” “anticipates,” “will,” and variations of such words or similar expressions are intended to identify such statements. These forward-looking statements include, without limitation, statements relating to the Company’s expectations regarding iMS’ on-going operations and its plans to optimize its portfolio of retail locations, the causes, length and outcome of the iMS bankruptcy process, the Company’s review of strategic alternatives related to iMS, and the impact of the iMS bankruptcy on the Company’s results of operation, liquidity or financial position. Any forward-looking statements contained herein are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct.

Numerous factors, many of which are beyond the Company’s control, could cause actual results to differ materially from any that may be expressed as forward-looking statements. These risk factors include risks associated with the causes, length and outcome of the iMS bankruptcy process; the approval of the DIP financing by the U.S. Bankruptcy Court; the performance of iMS’ on-going operations, including its ability to exit underperforming locations, retain employees, suppliers and customers, and conduct business as usual; iMS’ ability to fund its on-going operations through the DIP financing; iMS’ use of the funds anticipated to be received in the DIP financing; iMS’ ability to control costs during its bankruptcy process; the outcome of the Company’s review of strategic alternatives related to iMS; general economic, financial and industry conditions, particularly conditions relating to the financial performance and related credit issues present in the retail sector, as well as consumer confidence and the availability of consumer financing; changes in interest rates; the impact of the macroeconomic environment in both the U.S. and internationally on iMS and the Company; uncertainties arising from national and global events; industry competition; the effects of consolidation of retailers on revenues and costs; and consumer acceptance and changes in demand for the Company’s products.

Other potential risk factors include the risk factors discussed under the heading “Risk Factors” under ITEM 1A of Part 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. There may be other factors that may cause actual results to differ materially from the forward-looking statements contained herein. The Company undertakes no obligation to update any forward-looking statement contained herein to reflect events or circumstances after the date on which such statement is made.

https://seekingalpha.com/pr/17377718-tempur-sealy-agrees-provide-debtor-possession-financing-innovative-mattress-solutions

Tempur Sealy Agrees To Provide Debtor-In-Possession Financing To Innovative Mattress Solutions

|PR Newswire|About: TPX
PR NewswireLEXINGTON, Ky., Jan. 11, 2019 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) (the “Company”) has agreed, subject to bankruptcy court approval, to provide debtor-in-possession (“DIP”) financing to Innovative Mattress Solutions, LLC (“iMS”) in connection with iMS’ Chapter 11 bankruptcy filing. The Company has agreed to provide up to $14 million 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 $21 million 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.

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “Innovative Mattress Solutions has served over a million consumers and built equity for their and our brands in their markets. However, we believe iMS’ overextended retail footprint and thin capital structure were not designed to effectively respond to the competitive pressures of the recent retail environment. This caused the unexpected need for bankruptcy protection. We will review strategic alternatives related to iMS during its bankruptcy process with a focus on what is best for Tempur Sealy consumers in the affected markets.”

Forward-Looking Statements

This press release contains statements that may be characterized as “forward-looking” within the meaning of the federal securities laws, which includes information concerning one or more of the Company’s plans, objectives, goals, strategies, and other information that is not historical information. When used in this release, the words “believes,” “anticipates,” “will,” and variations of such words or similar expressions are intended to identify such statements. These forward-looking statements include, without limitation, statements relating to the Company’s expectations regarding iMS’ on-going operations and its plans to optimize its portfolio of retail locations, the causes, length and outcome of the iMS bankruptcy process, the Company’s review of strategic alternatives related to iMS, and the impact of the iMS bankruptcy on the Company’s results of operation, liquidity or financial position. Any forward-looking statements contained herein are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct.

Numerous factors, many of which are beyond the Company’s control, could cause actual results to differ materially from any that may be expressed as forward-looking statements. These risk factors include risks associated with the causes, length and outcome of the iMS bankruptcy process; the approval of the DIP financing by the U.S. Bankruptcy Court; the performance of iMS’ on-going operations, including its ability to exit underperforming locations, retain employees, suppliers and customers, and conduct business as usual; iMS’ ability to fund its on-going operations through the DIP financing; iMS’ use of the funds anticipated to be received in the DIP financing; iMS’ ability to control costs during its bankruptcy process; the outcome of the Company’s review of strategic alternatives related to iMS; general economic, financial and industry conditions, particularly conditions relating to the financial performance and related credit issues present in the retail sector, as well as consumer confidence and the availability of consumer financing; changes in interest rates; the impact of the macroeconomic environment in both the U.S. and internationally on iMS and the Company; uncertainties arising from national and global events; industry competition; the effects of consolidation of retailers on revenues and costs; and consumer acceptance and changes in demand for the Company’s products.

Other potential risk factors include the risk factors discussed under the heading “Risk Factors” under ITEM 1A of Part 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. There may be other factors that may cause actual results to differ materially from the forward-looking statements contained herein. The Company undertakes no obligation to update any forward-looking statement contained herein to reflect events or circumstances after the date on which such statement is made.

https://seekingalpha.com/pr/17377718-tempur-sealy-agrees-provide-debtor-possession-financing-innovative-mattress-solutions

January 11, 2019

CA Regulatory Update

ACC appeals against California spray foam priority product designation

Organisation - SCPThe American Chemistry Council has filed an appeal to get California’s Department of Toxic Substances Control (DTSC) to withdraw its designation of spray polyurethane foam (SPF) systems as a priority product under the Safer Consumer Products programme.

In a 2 January letter to the director of the DTSC, the ACC initiated the formal appeal process, reiterating an earlier request for the agency to withdraw the designation.

Under the SCP scheme, manufacturers of designated product-substance pairs are required to either complete an alternatives analysis to determine if a safer replacement is available, or reformulate to avoid the substance’s use.

Last year California designated SPF systems containing unreacted methylene diphenyl diisocyanates (MDI) its second priority product. In 2017 it had announced children’s foam-padded sleeping products containing flame retardants TDCPP or TCEP as the first product. However, as the marketplace had already phased the substances’ use out, this resulted in no notifications.

The designation of SPF systems has, however, been delayed by industry pushback. Last May, the ACC filed an informal protest regarding the listing. This temporarily halted the original September notification deadline.

The ACC argued that the DTSC should withdraw it because SPF systems do not meet the criteria for inclusion in the programme. And it said the department had not adequately demonstrated the potential for significant or widespread adverse effect from their use.

In a September meeting with them, the ACC proposed the agency enter into an enforceable consent agreement (ECA) instead to address concerns with the product.

The DTSC urged the ACC to ‘accept the results of this comprehensive, objective regulatory process, and comply with the requirements’

But in December, the DTSC rejected the request and said it was not permitted under the SCP Regulation to enter into an ECA. In its response it urged the ACC to “accept the results of this comprehensive, objective regulatory process, and comply with the requirements”.

This response prompted the ACC into filing their appeal which also reiterated the organisation’s request for the DTSC to withdraw the priority product designation for SPF systems and to reconsider its view that it lacks the authority to enter into an ECA.

Entering an agreement, it said, “would be the most time- and cost-efficient solution, would allow the public an opportunity to participate through public comments and public hearings, and could produce an alternatives analysis as one possible outcome.”

The ACC told Chemical Watch it is offering a ‘reasonable and responsible path forward that helps the state achieve its public health objectives in a faster, simpler, and more collaborative manner’

A spokesperson for the ACC told Chemical Watch it is offering a “reasonable and responsible path forward that helps the state achieve its public health objectives in a faster, simpler and more collaborative manner.”

The requirement for SPF manufacturers to notify the DTSC has been paused during the informal dispute process. The formal process will result in an additional stay, a spokesperson for the agency confirmed to Chemical Watch.

https://chemicalwatch.com/73040/acc-appeals-california-spray-foam-priority-product-designation

January 11, 2019

CA Regulatory Update

ACC appeals against California spray foam priority product designation

Organisation - SCPThe American Chemistry Council has filed an appeal to get California’s Department of Toxic Substances Control (DTSC) to withdraw its designation of spray polyurethane foam (SPF) systems as a priority product under the Safer Consumer Products programme.

In a 2 January letter to the director of the DTSC, the ACC initiated the formal appeal process, reiterating an earlier request for the agency to withdraw the designation.

Under the SCP scheme, manufacturers of designated product-substance pairs are required to either complete an alternatives analysis to determine if a safer replacement is available, or reformulate to avoid the substance’s use.

Last year California designated SPF systems containing unreacted methylene diphenyl diisocyanates (MDI) its second priority product. In 2017 it had announced children’s foam-padded sleeping products containing flame retardants TDCPP or TCEP as the first product. However, as the marketplace had already phased the substances’ use out, this resulted in no notifications.

The designation of SPF systems has, however, been delayed by industry pushback. Last May, the ACC filed an informal protest regarding the listing. This temporarily halted the original September notification deadline.

The ACC argued that the DTSC should withdraw it because SPF systems do not meet the criteria for inclusion in the programme. And it said the department had not adequately demonstrated the potential for significant or widespread adverse effect from their use.

In a September meeting with them, the ACC proposed the agency enter into an enforceable consent agreement (ECA) instead to address concerns with the product.

The DTSC urged the ACC to ‘accept the results of this comprehensive, objective regulatory process, and comply with the requirements’

But in December, the DTSC rejected the request and said it was not permitted under the SCP Regulation to enter into an ECA. In its response it urged the ACC to “accept the results of this comprehensive, objective regulatory process, and comply with the requirements”.

This response prompted the ACC into filing their appeal which also reiterated the organisation’s request for the DTSC to withdraw the priority product designation for SPF systems and to reconsider its view that it lacks the authority to enter into an ECA.

Entering an agreement, it said, “would be the most time- and cost-efficient solution, would allow the public an opportunity to participate through public comments and public hearings, and could produce an alternatives analysis as one possible outcome.”

The ACC told Chemical Watch it is offering a ‘reasonable and responsible path forward that helps the state achieve its public health objectives in a faster, simpler, and more collaborative manner’

A spokesperson for the ACC told Chemical Watch it is offering a “reasonable and responsible path forward that helps the state achieve its public health objectives in a faster, simpler and more collaborative manner.”

The requirement for SPF manufacturers to notify the DTSC has been paused during the informal dispute process. The formal process will result in an additional stay, a spokesperson for the agency confirmed to Chemical Watch.

https://chemicalwatch.com/73040/acc-appeals-california-spray-foam-priority-product-designation