US: New York-based owner-operator MCR Hotels plans to acquire the remaining shares of private members club brand Soho House.
Soho House went public in 2021 at a $2.8 billion valuation.
Four years later, MCR Hotels has signed a definitive agreement to take Soho House private. CEO of MCR, Tyler Morse, will join the company’s board of directors as vice chairman.
Morse said: “Soho House is a place of creative connection, where freedom of expression and character thrive. All of us at MCR are excited to be part of the Soho House journey, helping to create more experiences, interactions and memories alongside friends and members. We have long admired Soho House for bringing together cultures from around the world into a global network of 46 Houses, and we look forward to the continued growth of that fabric, starting with four new Houses opening soon.”
Soho House executive chairman Ron Burkle and his investment firm Yucaipa Companies will roll its controlling equity in the company and retain majority control of the business.
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. It values Soho House at around $2.7 billion.
The share premium sits well below the $14-per-share price when Soho House floated on the New York Stock Exchange.
Andrew Carnie, CEO of 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. Against a backdrop of challenging economic conditions and global uncertainty, from 2022-2024 we delivered consistent, disciplined growth with revenue increasing at an average annual rate of double digit growth, and adjusted EBITDA growing at over 50 per cent annually during the same period.
“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. Behind the scenes, we’ve embarked on a significant transformation of our finance and operational systems, giving us the tools to scale efficiently and position the business for long-term success.”
Carnie added: “Returning to private ownership enables us to build on this momentum, with the support of world class hospitality and investment partners. I’m incredibly proud of what our teams have accomplished and am excited about our future, as we continue to be guided by our members and grounded in the spirit that makes Soho House so special.”
Funds managed by affiliates of Apollo are supporting the transaction through a hybrid capital solution, providing more than $700 million in equity and debt financing.
Reed Rayman, partner and deputy head of hybrid at Apollo, said: “We are pleased to leverage our scale and flexibility to provide a highly customised capital solution to support this transaction. This is a prime example of Apollo’s hybrid capital at work, flexing across both debt and equity and working closely with the company and its investors to craft a structured solution at scale.”
Actor Ashton Kutcher alongside a consortium of strategic investors will inject additional equity capital. Kutcher will also join the board of directors at Soho House.
Existing shareholders such as Richard Caring, Nick Jones and Goldman Sachs Alternatives will roll the majority of their shares of the common stock. Goldman Sachs Alternatives is also committing additional capital.
Hybrid Capital at Goldman Sachs Alternatives has been invested in Soho House since 2021 and will continue to support the business through this transaction.
The proposed transaction is expected to close by the end of 2025, subject to regulatory approvals and other closing conditions. Upon completion, Soho House common stock will cease trading on the New York Stock Exchange.
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.
