WASHINGTON — Sealy Corp. shares climbed Friday in the mattress maker's first day of trading on the New York Stock Exchange.

Sealy's shares closed at $17.50 a share, up more than 9 percent from the IPO price of $16. The company, based in Trinity, N.C., sold 28 million shares of its stock at the high end of the range set by underwriters.

The offering was a boon for Sealy's private owners: They were able to sell 8 million shares in the IPO, more than twice the 3.3 million they had originally planned. The proceeds from the private shares sold won't go into Sealy's coffers.

Actually, half of the $296 million Sealy will receive, net of fees, from the 20 million shares it sold in the IPO won't end up staying in the company's bank accounts, either. The private owners of the company, which include private-equity firm Kohlberg, Kravis Roberts & Co. and private-equity affiliates of underwriters JPMorgan and Bank of America, are expected to receive a special $125 million dividend funded by IPO proceeds. A special $17.3 million bonus is being paid to management of Sealy, as is an $11 million management termination fee for KKR.

The remainder of the money raised will be used to pay down Sealy's debt, which stood at $961.8 million in November. In its prospectus, Sealy said that even if the IPO had been completed in November, the company's debt would have pushed its tangible book value into negative territory, meaning that if the company were liquidated today, stockholders would receive nothing.

Although the IPO appeared to be structured to provide sweet dreams for Sealy's private investors, new investors in the IPO aren't buying a flea-ridden mattress company.

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Sealy has shown generally good financial performance in recent years; it has been able to raise prices on its products, and claims it has a disproportionate share of the premium $1,000-plus mattress segment.

The company has developed new product lines, such as no-flip mattresses and latex mattresses, that cater to changing bedding tastes.

Unlike many private equity-owned IPOs that shower prior owners with dividends and then close the spigot for new public investors, the company plans to pay a modest 2 percent annual dividend to its shareholders.

KKR, which bought Sealy from Bain Capital in April 2004 for $1.5 billion, putting in $436.1 million in cash, will continue to hold more than half the shares outstanding of Sealy after the IPO, and so it has a stake in ensuring the company's continued success.

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