An investor group led by US hotel owner-operator MCR has agreed a deal to acquire Soho House for $2.7bn.
The private members club, which opened its first space in 1995, currently operates 46 Soho Houses, eight Soho Works, two Scorpios Beach Clubs – in Mykonos and Bodrum – and a number of other hotels around the globe.
Under the terms of the deal, holders of Soho House & Co (SHCO) shares will receive $9 per share in cash, which represents a premium of approximately 83% to the company’s closing share price on 18 December 2024. MCR will become a shareholder of SHCO and its chairman Tyler Morse will join the company’s board of directors as vice chairman.
Funds managed by affiliates of Apollo are supporting the transaction by providing additional capital in the form of debt and common equity and a portion of proceeds will be used to refinance the company’s existing senior secured notes.
Further new equity capital will be provided by a consortium of strategic investors led by Ashton Kutcher, who will also join the company’s board of directors following completion of the transaction.
Existing significant shareholders of SHCO, including Richard Caring, Nick Jones and Goldman Sachs Alternatives, will roll the majority of their shares of the common stock of the company. Goldman Sachs Alternatives is also committing additional capital.
Eric Deardorff, chairman of the special committee of Soho House & Co, said: “After detailed consideration by the special committee with the assistance of our outside financial and legal advisors, we determined that the $9.00 per share in cash consideration delivers meaningful and immediate value to stockholders. We look forward to working with the teams at the company and the various financing sources to complete the merger.”
Andrew Carnie, CEO of Soho House & Co, added: “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. Since our IPO in 2021, we’ve focused on building a stronger, more resilient business. 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% 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 – while continuing to build strong connections with members and invest in Houses that we’ve called home for many years. 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.
“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.”
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.
“MCR’s investment in Soho House represents a strategic opportunity to combine our operational expertise with one of the most distinctive brands in hospitality. Our shared goal is to safeguard the member experience, drive sustainable international growth for House members, and protect and expand the cultural and creative foundation that has made Soho House a global industry leader. Together, we are confident in our ability to deliver long-term value for members, employees and shareholders alike.”
Reed Rayman, partner at Apollo, added: “Soho House is a globally renowned brand with a talented management team and exciting growth prospects. 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.”
Beat Cabiallavetta, global head of hybrid capital at Goldman Sachs Alternatives, said: “We look forward to our continued partnership with Soho House. The company has established itself as a leading global membership platform, with a differentiated offering and strong track record. We are excited to support the next stage of Soho House’s development in partnership with its management team and shareholders.”
The transaction is expected to close by the end of 2025, subject to regulatory approvals and other closing conditions.
