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Written by Haider Saleem
Journalist and Political Analyst | LinkedIn / X
A group led by MCR Hotels has agreed to take Soho House & Co. private at an enterprise value of about $2.7bn, offering public shareholders $9 in cash per share.
This article explores:
- The deal – explained
- Two finance technicalities explainers for beginners
- Why go private now?
- The valuation
- Financing & leverage
- An “opaque” deal?
- What it means for public shareholders
- Their global footprint
- What the watch for
1) The deal, explained
Price & premium
The $9 cash offer is ~18% above the prior Friday close (15 August 2025). There was an ~83% premium versus the 18 December 2024 close, the last trading day before Soho House disclosed an approach. Importantly, $9 remains below the $14.21 peak reached in August 2021, so some earlier holders will still crystallise losses.
Who’s leading and who stays.
· MCR Hotels leads the new investor group;
· Ron Burkle/Yucaipa will retain majority control;
· Tyler Morse (MCR’s CEO) and Ashton Kutcher will join the board.
· Apollo Global Management is backing the deal with a blend of debt (>$700m) and equity (~$150m), and will not take a board seat, per Bloomberg.
How it’s financed
Funds managed by Apollo will provide >$700m of debt plus ~$150m in common/preferred equity in a hybrid package. Apollo will not have a board seat.
Free-float clarification
The Guardian reports the new investors will pay $9 per share for roughly the public free float (about 15% of total shares).
The transaction is expected to proceed subject to customary approvals before the stock delists.
2)Two finance technicalities explainers for beginners
- Enterprise value (EV) vs equity value.
EV is the value of the entire business including net debt and certain obligations; equity value is what shareholders receive. That is why headlines cite EV ≈ $2.7bn while public investors see $9 per share in cash. - How a take-private works.
A buyer (or consortium) offers a per-share cash price, lines up financing, obtains approvals, and – once completed – the stock delists. Former public holders receive cash; ownership consolidates with the buyer group. - What is “hybrid financing”?
Funding that blends features of debt (priority, coupons) and equity (subordination, potential upside – for example, preferred equity or convertibles. Bloomberg adds Apollo has deployed >$10bn across hybrid deals this year, underscoring its role in this structure.
3) Why go private now?
Since listing in 2021, Soho House struggled to persuade public markets on a credible path to durable profitability, among questions about whether rapid global expansion diluted exclusivity – an important driver of pricing power. Shares remained volatile and well below early peaks.
The company also faced a short-seller attack in 2024 drawing WeWork comparisons; management rejected the report as containing “factual inaccuracies” and “false and misleading statements,” adding to public-market noise.
Going private gives the owners more flexibility to execute a multi-year plan – but the combination of the valuation and new leverage raises the bar for consistent cash generation.
4) Valuation lens: making “~16× 2025E EBITDA” intuitive
The FT Lex column pegs the transaction at ~16× expected 2025 EBITDA (S&P Capital IQ).
For beginners: EBITDA is a rough proxy for operating cash profit before interest, taxes, depreciation and amortisation. Paying ~16× implies buyers value the business at roughly sixteen years of that annual cash-profit proxy (before interest and tax – a level that implies meaningful progress on margins and cash generation.
Lex’s illustrative estimate suggests that, to target something like a 10% annual return, owners might need about $270m in post-tax operating income over time, implying Soho House would need to roughly double both revenue and EBITDA margin from recent levels. In practical terms: grow membership and spend per member, and/or tighten costs as newer houses mature. Revenue rose ~9% in H1, which helps, but leverage magnifies both upside and downside.
5) Financing & leverage: the post-deal capital stack
~$845m of new debt from Apollo and Goldman Sachs was used in part to refinance ~$700m of existing borrowings. In a higher-rate environment, debt service increases the execution hurdle: more of each incremental EBITDA dollar must persistently pass through to cover interest and still fund reinvestment.
Leverage can amplify returns if operations scale smoothly; it can also constrain flexibility if growth softens or pricing power fades.
6) Process & activism: the “opaque” debate
Third Point (Dan Loeb) criticised the process as “opaque” and urged Soho House to canvass higher offers – a familiar minority-holder concern in take-privates featuring significant insider participation. The buyer group emphasises strategic fit and financing certainty, but process optics are part of the story for outside investors.
7) What it means for public shareholders
If the transaction completes, public shareholders receive $9 cash per share and exit. The premium is real relative to the two baselines (15 August 2025 vs 18 December 2024), but the absolute price remains below 2021 highs – clarifying why some earlier investors may realise losses. Understanding both the premium math and price history helps avoid misreading the headline number.
After closing, Soho House will be private. For most retail investors, access effectively ends unless they participate through the private owners’ vehicles, which typically sit outside public-market channels.
8) Global footprint
As of June, Soho House counted 46 clubs, >200,000 members, and ~111,000 on the waitlist. Fees rose in January; Bloomberg cites ~£3,450 for global access in London and ~$5,850 in New York. These datapoints underline the core execution tension: preserve exclusivity (pricing power) while scaling sustainably.
9) Key execution questions (to watch)
- Can operating economics meet the multiple? A ~16× EBITDA valuation implies meaningful margin and cash-flow progress.
- Will leverage help or hinder? ~$845m of new debt and a ~$700m refi increase discipline—and sensitivity to shocks.
- Is demand resilient? Premium hospitality is discretionary; analysts have worried about dilution of exclusivity as the estate grows.
- Governance optics. Insiders retain majority control; Apollo supports the deal financially without a board seat – a detail observers may watch as the strategy unfolds off-market.
Bottom line
This take-private combines hotel-operator know-how (MCR) with capital-markets structuring (Apollo) and long-standing insider backing – at a valuation that assumes material operating improvement. What everyone will be looking out for now if the they can grow and monetise the network.
Sources
Bloomberg; FT Lex; BBC News; The Guardian; USA Today.
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