US: New York-based owner-operator MCR Hotels intends to purchase the remaining shares in private members club Soho House.
Soho House went public in 2021 A $2.8 billion valuation.
Four years on, MCR Hotels The agreement is finalized to privatize Soho House. Tyler Morse will be the vice chairman of MCR’s board.
Morse stated: “Soho House fosters creativity, freedom of expression and character. MCR is excited to be a part of Soho House’s journey and create new experiences, memories and interactions with friends and members. “We have admired Soho House since it was founded for its ability to bring together cultures around the globe into a network of 46 Houses. We look forward to seeing this fabric grow, starting with the four new Houses that will be opening soon.”
Soho House’s executive chairman Ron Burkle, and his investment company Yucaipa Companies, will retain control over the business by rolling their controlling equity.
Stock holders will receive $9 per share in cash – a premium of approximately 83 per cent over the closing stock price as of 18 December 2024. Soho House is valued at $2.7 billion.
The premium is well below the $14 per share price that Soho House flounced at the New York Stock Exchange.
Andrew Carnie, CEO Soho House & Co, said: “This transaction reflects the strong confidence our existing and incoming shareholders have in the future of Soho House & Co., and the transformation we’ve led since becoming a public company. We delivered consistent and disciplined revenue growth in the face of challenging economic conditions. Our adjusted EBITDA increased by over 50% annually from 2022-2024.
“We’ve expanded our global footprint, welcoming new members into Houses in creative and culturally important cities such as São Paulo, Mexico City, Nashville, and Paris. We’ve been transforming our financial and operational systems behind the scenes. This has given us the ability to scale the business efficiently and position it for long-term growth.
Carnie continued: “Returning the hotel to private ownership allows us to continue this momentum with world-class hospitality and investment partners.” I’m proud of the work our teams have done and excited for our future. We continue to be guided our members and grounded in our spirit that makes Soho House unique.
The transaction is supported by funds managed by Apollo affiliates, which provide more than $700 millions in equity and debt funding.
Reed Rayman is a partner and the deputy head of hybrid at ApolloThis is a prime example of Apollo’s hybrid capital at work, flexing across both debt and equity. We worked closely with the company and its investors to craft a structured solution at scale. Apollo’s hybrid financing is at work here, as it flexes across debt and equity. It also works closely with the company and investors to create a structured solution.
Ashton Kutcher will be bringing in additional equity capital with the help of a consortium consisting of strategic investors. Kutcher joins the board at Soho House.
Existing investors such as Richard Caring Nick Jones and Goldman Sachs Alternatives, will roll over the majority their shares of common stock. Goldman Sachs Alternatives will also commit additional capital.
Hybrid Capital from Goldman Sachs Alternatives invested in Soho House starting 2021. This transaction will support the business.
The proposed transaction should close by 2025, provided that regulatory approvals are obtained and other conditions of closing are met. The New York Stock Exchange will stop trading Soho House common stocks upon completion.
Highlights:
• MCR Hotels will take Soho House private in a $2.7B deal, four years after its IPO.
• Shareholders will receive $9 per share, an 83 per cent premium over December 2024 prices.
• Ron Burkle’s Yucaipa retains majority control, while Apollo and Goldman Sachs provide financing.
• Actor Ashton Kutcher joins the board as part of a new investor consortium.
