Soho House agrees to US$2.7b take-private deal
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The news: A group of investors led by New York-based MCR Hotels is taking members-only club Soho House private in a USD2.7 billion ($4.15 billion) deal.
The numbers: Soho's shareholders will receive USD9 per share, a 17.8% premium to the stock's closing price of USD7.64 on Friday. MCR and its chairman and CEO Tyler Morse will acquire the outstanding shares of Soho House not held by certain significant shareholders.
The FT reports that the deal values the company’s equity at roughly USD1.8 billon, excluding debt, according to people familiar with the matter. Apollo Global Management is providing more than USD800 million in debt and equity financing, the people added.
The context: Morse will join the Soho House board, but Ron Burkle, Soho’s executive chairman, and the existing shareholder Yucaipa Companies LLC will retain majority control.
A press announcement on the deal says that further new equity capital will be provided by a consortium of strategic investors led by technology investor Ashton Kutcher, who will also join the Company’s Board of Directors following completion of the transaction.
The exclusive club was originally founded in London’s Soho in 1995, but has expanded to 46 locations globally and has notched up over 200,000 members.
The group has struggled to balance expansion while maintaining exclusivity and since going public in 2021 at USD14 per share, the stock price has been volatile. In January this year, activist investor Dan Loeb revealed his 10% stake in the business.
What they said: Tyler Morse, chairman & CEO of MCR said: “MCR’s investment in Soho House represents a strategic opportunity to combine our operational expertise with one of the most distinctive brands in hospitality. Our shared goal is to safeguard the member experience, drive sustainable international growth for House members, and protect and expand the cultural and creative foundation that has made Soho House a global industry leader. Together, we are confident in our ability to deliver long-term value for members, employees and shareholders alike.”
The sources: Soho House press release, Bloomberg, WSJ, FT
