MCR Hotels to Buy Soho House for $2.7 Billion
MCR Hotels, the third largest hotel owner-operator in the US, on Monday agreed to acquire the UK-based Soho House & Co (SHCO), the global membership platform that connects a vibrant, diverse, and international group of members, for $2.7 billion.
SHCO Executive Chairman Ron Burkle and the Yucaipa Companies LLC (Yucaipa) will roll their controlling equity interests in the Company and retain majority control of the business.
Holders of common stock of the SHC) will receive $9 per share in cash, a premium of approximately 83% over the closing stock price as of 18 December 18, the last trading day prior to Soho House’s announcement of receipt of the offer, implying a total enterprise value of approximately $2.7 billion for SHCO.
Under the terms of the agreements, MCR Chairman Tyler Morse will join the Company’s Board of Directors as Vice Chairman. MCR’s portfolio includes iconic assets such as the TWA Hotel at JFK Airport, The High Line Hotel and the Gramercy Park Hotel in New York City and the BT Tower in London.
MCR’s cloud-based hospitality software assets include property management system Stayntouch and hotel operations software Optii. MCR’s hotels are frequently featured in Travel + Leisure’s World’s Best Hotels and Condé Nast Traveler’s Readers’ Choice Awards. MCR was also named one of Fast Company’s 10 Most Innovative Travel Companies.
Funds managed by affiliates of Apollo are supporting the transaction through a hybrid capital solution, by providing additional capital in the form of debt and common equity, 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 prominent technology investor Ashton Kutcher, who will also join the Company’s Board of Directors following completion of the transaction.
Existing significant shareholders 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. Hybrid Capital at Goldman Sachs Alternatives has been invested in Soho House since 2021 and will continue to support the business through this transaction.
Special Committee Okays Deal
As previously announced in December 2024, SHCO’s Board of Directors formed a Special Committee comprised solely of independent directors and advised by its own independent legal and financial advisors.
Special Committee Chairman Eric Deardorff said that after detailed consideration by the Special Committee with the assistance of their outside financial and legal advisors, it was concluded that the $9 per share in cash consideration delivers meaningful and immediate value to stockholders.
SHCO CEO Andrew Carnie said that this transaction reflects the strong confidence their existing and incoming shareholders have in the future of the company, and the transformation they have led since becoming a public company.
“Since our IPO in 2021, we have 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,” he said.
Tyler Morse said that SHCO is a place of creative connection, where freedom of expression and character thrive and MCR are excited to be part of the Soho House journey, helping to create more experiences, interactions and memories alongside friends and members.
“MCR’s investment in SHCO 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,” he added.
