So Close but Yet So Far for Sterling Partners

Sterling Partners had its deal to acquire a 52.5% stake in Select Comfort (NASDAQ, SCSS) voted down when it failed to receive a majority of shareholder support, with only 49.94% of shareholders voting in favor. The deal struck in May was for Sterling to acquire 50 million shares at $0.70 per share for a total investment of $35 million. However, since May, the company has managed to turn things around and its stock price recently hit a high of $3.24 per share.

Private equity firms have invested in over 100 home furnishing companies since the beginning of 2005, according to the PitchBook platform. The are a number of investors that have made multiple investments in the industry, led by Sun Capital Partners with seven and Linsalata Capital with four. With companies such as Comfor-Pedic, Serta International and Spring Air, mattress companies are well represented in PE portfolios. Despite the attractiveness of the home furnishings industry, it has been out of favor in 2009 due to the pull-back in consumer spending -- only four PE-backed deals have been completed thus far.