The Ontario Teachers' Pension Plan, one of Canada's largest pension funds, is buying a stake in Simmons Co., the U.S. maker of Beautyrest mattresses, which is restructuring under bankruptcy-court protection from creditors. 

The Atlanta-based company said Friday it plans to file for Chapter 11 bankruptcy shelter in a move that will put new owners in charge of the bedding unit and significantly lower the company's debt.

The $760-million-US deal, also involving private-equity fund Ares Management LLC, is expected to reduce Simmons's total debt from about $1 billion to $450 million US without affecting business operations. 

Privately held Simmons said the restructuring includes the acquisition of Simmons Bedding Co., its subsidiaries and parent company Bedding Holdco Inc. by affiliates of Ares Management and Teachers' Private Capital, the private investment branch of the Ontario Teachers' Pension Plan. 

"To adjust to the unprecedented economic events that have affected many companies over the past year, we have worked hard on financially restructuring our company to continue serving you, the consumers, who are the life of our business," Simmons president Steve Fendrich said in a release. 

"I'm delighted to tell you that the board of directors at Simmons has approved a restructuring plan and accepted a bid."

Like appliance makers and other companies dependent on the health of the housing business, Simmons has been hit hard by the slumping new-home market in the United States, which has been battered by the subprime mortgage crisis and falling prices. 

The deal includes equity from Ares and Teachers' and from some of Simmons's current lenders, along with debt commitments from certain Simmons lenders.