Soho House US$2.7bil buyout to end club's market pain
New York: A group of investors led by the owner of several boutique New York hotels have agreed to take Soho House & Co private in a US$2.7bil deal for the members' club operator that's struggled since its initial public offering.
Hotel owner MCR and its chairman and chief executive officer, Tyler Morse, will take a stake in Soho House, which has spread its roots as a London haunt for creative types to venues all over the world.
Morse will join the board but billionaire Ron Burkle, Soho House's executive chairman, and Yucaipa Cos will retain majority control, the company said Monday.
A consortium led by Ashton Kutcher will inject new equity, with the actor-turned-technology investor also joining the board upon completion.
Funds managed by affiliates of Apollo Global Management Inc are supporting the Soho House transaction.
They will contribute more than US$700mil in debt financing and roughly an additional US$150mil in common and preferred equity, a person familiar with the matter said.
Apollo won't have a seat on the board, the person said, asking not to be identified discussing confidential information.
A representative for Apollo declined to comment.
Founded by entrepreneur Nick Jones, Soho House started out as a members-only club in London in 1995, but has since expanded significantly with venues all over the world including in New York, Bangkok and Rome.
Instead of catering for people working in finance or politics, the venues target the creative classes – those in media, advertising and music. Suits, ties and 'corporate attire' are discouraged.
Burkle championed the effort to go private following a disappointing share performance by Soho House, which listed in 2021 at US$14 a share.
Since the initial public offering, Soho House has faced questions over service and whether it lost its exclusivity by expanding too rapidly.
Shareholders will receive US$9 in cash for each share, an 83% premium over the closing stock price of Dec 18, the last trading day before Soho House first said it had received an offer.
Soho House had 46 clubs as of June, accommodating more than 200,000 members, with a further 111,000 applicants on the waiting list.
The company raised fees across all its clubs in January. A typical member in London now pays £3,450 a year to access all houses globally, while in New York it's $5,850. — Bloomberg
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