MCR, Apollo Lead $2.7B Deal To Take Soho House Private
MCR Hotels is planning to spend $2.7B on a deal that will see Soho House & Co.'s public stock go the way of its private clubs.
MCR and CEO Tyler Morse will buy all outstanding shares not held by certain shareholders for $9 apiece, an 83% premium on the stock’s price when a potential offer to take the company private at that price point was first disclosed in December.
The multilayered deal will see Ron Burkle, Soho House’s billionaire executive chairman, and Yucaipa Cos., his private equity firm, retain majority control of the company. Funds managed by Apollo Global Management are supporting the deal.
Former That ‘70s Show star Ashton Kutcher is leading a group of strategic investors providing new equity to Soho House as part of the deal. The actor-turned-tech-investor will join the company’s board along with MCR’s Morse, who will be vice chairman after the deal closes, which is expected to happen before the end of the year.
Other significant shareholders, including Goldman Sachs Alternatives, British investor Richard Caring and Soho House founder Nick Jones, are rolling over the majority of their stock into the private company, according to a release. Goldman Sachs, which has been invested in Soho House since 2021, is also committing additional capital.
Funds managed by Apollo will support the transaction through both debt and common equity, and the proceeds will be used to refinance all of Soho House’s existing senior secured notes.
Soho House also announced Monday that it was bringing on Neil Thomson as its new chief financial officer. Thomson will work from London and was most recently the CFO of Tasty Restaurant Group, a quick-service franchisee backed by private equity.
Soho House started as a members-only club in London in 1995 but has since expanded to include more than 50 locations in cities like New York, Dubai and Miami, with hotels and private clubs that cater to creatives as opposed to white-collar workers.
MCR is one of the largest hotel owner-operators in the United States, with a portfolio of more than 25,000 rooms across 107 cities, including New York City’s iconic Gramercy Park, which it purchased for $180M in 2023.
“Soho House is a place of creative connection, where freedom of expression and character thrive," Morse said in a statement. "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.”
Soho House had a bumpy run on the public market. It went public at $14 per share in June 2021 but never held on to that valuation. The stock traded for between $5 and $6 for most of 2023 and 2024 but bounced back on December’s offer to take the company private.
The stock jumped again Monday to more than $8.50 per share, approaching the buy-out price.
