Heartland HelpsSprings Go Private

Springs Industries Inc., the well-known manufacturer of towels, sheets, and other household textiles, is leaving public ownership with an unusual deal structure for a going-private transaction. The buying group includes the Close family, which will keep control of the company, and LBO sponsor Heartland Industrial Partners LP, which will take a minority stake. As a result of the $46-a-share cash purchase, the family will boost its 41% ownership to 55% and Heartland will hold 45%. The cost to buy in the public’s interest, including assumption of debt, is around $846 million. How Heartland planned to exit its minority stake down the road was not disclosed. Daniel P. Tredwell, a principal and co-founder of the firm, declined to say if any buy/sell or other exit provisions were in place. “I can’t talk about what’s in the (purchase) agreement,” he said in a telephone interview. However, Tredwell added, “You can assume that we have done the things we need to do as fiduciaries to protect our investors.” Heartland’s contribution has made it financially easier for the Close family to take Springs out of the public arena. The LBO firm is committing $225 million in equity to the purchase, with J.P. Morgan Chase & Co. providing debt for the rest of the financing. Springs’ product lines include such famous brands as Wamsutta, Springmaid, and Regal. But like many “old economy” companies, its stock has had its ups and downs. The shares closed on the New York Stock Exchange on April 30 at $44.55, or slightly below the purchase price. The 52-week range was $22.50 to a high of $51.