US company MCR Hotels is leading a group of investors in a take-private deal for membership and hotel group Soho House.
The move projects an implied enterprise value of up to USD2.7 billion for the business, though that includes taking on around USD700 million of debt. Soho House will no longer be listed on the US market, instead becoming a private company once more.
New backers come into play
A proposed transaction includes the acquisition of outstanding shares by MCR and its chairman and CEO Tyler Morse. Investor Apollo Funds will provide additional debt and equity capital, covering existing Soho House debts in the form of secured notes.
The deal has been supported by key existing Soho House investors and executives. These include Ron Burkle, the group’s executive chairman, and the Yucaipa Companies who between them hold a controlling interest in the Soho House business. Additionally, significant investors such as Richard Caring, Nick Jones and Goldman Sachs Alternatives will remain invested in the business.
It was in late 2024 that the group’s board of directors set up a Special Committee, to review approaches to the company that would take it private by way of effectively a takeover bid. The group listed in 2021, and shortly after that date, its shares hit a peak valuation totalling USD2.8 billion. Since then, the shares have fallen considerably.
In the intervening years, the Soho House group has grown from 28 properties worldwide to a portfolio of 46. Many of these are membership clubs, with hotel accommodation open to all. But the company remains a hybrid, earning an increasing volume of its revenues from membership subscriptions. While its early years concentrated on delivering a great member experience, once in the public eye, there was more pressure to demonstrate profits and improving margins across food and beverage sales, accommodation sales and membership revenues.
Lead bidder MCR Hotels lays claim to being the third largest hotel owner-operator in the United States, with a number of landmark properties in its portfolio. These include the TWA Hotel at JFK Airport, created from a historic terminal building; and the High Line Hotel and the Gramercy Park Hotel in New York City. MCR also acquired the BT Tower in London, with plans to create yet another iconic hotel in a well known architectural landmark.
CEO reflects on recent progress
“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,” said CEO Andrew Carnie. “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.”
The Soho House brand continues to grow, with an upcoming opening of Soho House Manchester. A site in Tokyo is under construction, while there are also plans for Ned American Stock Exchange in New York, and for Soho House Sydney.
