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    Select Comfort gets some badly needed financial padding

    By Dan Haugen | Published Tue, May 26 2009 9:21 am

    The pile of cash under Select Comfort's mattress has been shrinking for months. In the last two quarters combined, the company lost about $60 million because of deflated sales.

    The bed retailer gets some badly needed financial padding today with the announcement that a private equity firm will invest about $35 million in the company. Sterling Partners, a firm based in Baltimore, said it will buy 50 million shares of Select Comfort's common stock at 70 cents each, which adds up to just more than 50 percent ownership.

    Select Comfort CEO Bill McLaughlin said in the company's statement that Sterling Partners' investment helps improve the company's short- and long-term "liquidity situation." He said the firm is committed to realizing Select Comfort's "long-term potential."

    As part of the agreement, Select Comfort will reduce the size of its board of directors to nine members and appoint five nominees designated by Sterling Partners.

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