Somnigroup reprices $1.6 billion term loan, prepays $100 million

DALLAS - Somnigroup International Inc. (NYSE:SGI), currently valued at $13.4 billion and trading near its 52-week high of $69.87, announced Wednesday it has successfully repriced its $1.6 billion Term Loan B due October 2031, reducing the applicable margin by 25 basis points from SOFR plus 2.50% to SOFR plus 2.25%.

The bedding company stated it will prepay $100 million of the outstanding term loan principal balance using cash on hand and revolver borrowings. With total debt of $6.9 billion and a debt-to-equity ratio of 2.53x, according to InvestingPro data, the company’s repricing includes a further potential step-down to SOFR plus 2.00% if total net leverage falls below 3.0 times adjusted EBITDA.

Somnigroup estimates the repricing and prepayment will generate approximately $5 million in annualized cash interest savings, with potential for an additional $4 million in savings if the leverage threshold is achieved.

"We are very pleased to announce this successful debt repricing, which demonstrates continued lender confidence in Somnigroup," said Scott Thompson, Somnigroup Chairman and Chief Executive Officer, in the company statement. The company has shown strong performance with revenue growth of 9% over the last twelve months to $5.3 billion, maintaining a healthy gross profit margin of 44.6%. InvestingPro analysis indicates 12 key insights about SGI’s performance and valuation, available to subscribers.

Somnigroup describes itself as the world’s largest bedding company with operations in more than 100 countries. The company’s portfolio includes brands such as Tempur-Pedic, Sealy, Stearns & Foster, and Sleepy’s.

The Term Loan B matures in October 2031. The announcement comes as part of the company’s ongoing financial management strategy, according to the press release.

In other recent news, Somnigroup International Inc. reported its first-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $0.49, which slightly exceeded the forecasted $0.48. However, the company’s revenue fell short of expectations, coming in at $1.6 billion compared to the anticipated $1.63 billion. This revenue miss led to a revision of the 2025 EPS guidance to a range of $2.30 to $2.65, down from previous estimates. Additionally, Somnigroup has launched a secondary stock offering of over 15 million shares, with Goldman Sachs & Co. LLC serving as the sole underwriter for the transaction. The company has not received any proceeds from this sale, as the shares were sold by the former majority shareholder of Mattress Firm Group Inc. In terms of analyst actions, there were no specific upgrades or downgrades mentioned, but the company’s future guidance reflects ongoing market challenges, including a declining U.S. bedding market. Somnigroup is also focusing on its international operations, which are reportedly growing at a mid-single-digit pace, despite the domestic market challenges.

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