Soho House & Co. is embarking on a new path, transitioning from a publicly traded entity to a privately held company in a transaction valued at approximately $2.7 billion, encompassing its existing debt. This strategic maneuver, driven by a consortium of investors including hotel magnate MCR and acclaimed actor Ashton Kutcher, promises a transformative period for the renowned members' club. The agreement offers shareholders a per-share consideration of $9.00, signaling a pivotal moment for the enterprise that debuted on the public market in 2021. This shift is anticipated to inject new capital and strategic vision, steering the club towards a revitalized future under private stewardship.
The announcement of Soho House's impending privatization on a recent Monday sent its stock soaring by 16% in pre-market trading, reflecting investor enthusiasm for the proposed deal. Under the terms of the agreement, shareholders are slated to receive $9.00 in cash for each share they hold. This valuation represents a notable premium over the $7.64 closing price recorded on the preceding Friday, although it remains below the $14 initial public offering (IPO) price established when the company first went public in 2021.
A distinguished group of investors, spearheaded by MCR and its chief executive, Tyler Morse, is poised to acquire the outstanding shares of Soho House not already held by key significant stakeholders. As part of this significant restructuring, billionaire Ron Burkle, who currently serves as Soho House's executive chairman, along with Yucaipa Companies LLC, will retain their controlling interest in the company. Furthermore, Tyler Morse is set to assume a prominent role on the board as vice chairman, indicating a collaborative leadership approach moving forward.
In a notable development, a strategic investment consortium led by Hollywood luminary Ashton Kutcher is committing fresh equity capital to the venture. Following the finalization of the deal, Kutcher is expected to join the company's board of directors, bringing his unique perspective and influence to the club's strategic direction. Additional financial backing for this private acquisition is being provided by funds managed by affiliates of Apollo Global Management and Goldman Sachs Alternatives, underscoring the broad financial confidence in Soho House's future. MCR, recognized as the third-largest hotel owner-operator in the United States, boasts an impressive portfolio that includes iconic properties such as the TWA Hotel at New York's John F. Kennedy International Airport, The High Line Hotel and the Gramercy Park Hotel in Manhattan, and London's BT Tower, further solidifying the strategic alignment and potential synergies of this partnership.
The decision to privatize Soho House marks a strategic pivot designed to foster long-term growth and operational agility away from the pressures of public market scrutiny. This transition, backed by significant financial and strategic partners, is set to usher in a new era for the exclusive members' club. It aims to enhance its value proposition and expand its global footprint, leveraging the expertise and resources of its new leadership and investor base to ensure its continued prominence in the luxury hospitality sector.