Struggling bed manufacturer
is receiving $35 million in padding from a private equity firm.
The news sent shares of Select Comfort soaring 24% to 99 cents in afternoon trading.
Sterling Partners will purchase 50 million shares of Select Comfort at 70 cents a share, giving the private equity first a 53% stake in Select Comfort.
The deal will also allow Sterling to name five members to the company's board. Select Comfort will reduce its board by one member, bringing the total size down to nine members.
Select Comfort will also gain access to $70 million in credit from an amended agreement with lenders.
The agreement is subject to shareholder approval.
Last month, Select Comfort recorded a loss of $2.7 million, while its sales dropped 17% to $139.6 million in the first quarter. The company also closed 30 stores during the quarter and expects to shutter another 25 by the end of the year.
announced earlier in the month that it would refinance its debt to improve liquidity, increase maturity dates and remove quarterly maintenance-based covenants. And
maintained its full-year outlook of 70 cents to 90 cents per share on revenue of $700 million to $740 million.
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