Durational Capital Management to acquire company in transaction expected to close in 1st quarter of 2022
Casper Sleep, the high-profile direct-to-consumer mattress brand, is going private after a relatively brief stint as a public company.
It said supply chain challenges had impaired the company’s “liquidity position.”
The New York-based company announced that it has entered into a definitive agreement to be acquired by Durational Capital Management LP for $6.90 per share in an all-cash transaction expected to close in the first quarter of 2022.
Private equity firm Durational has invested in racetrack Churchill Downs, poultry producer Sanderson Farms, and fast-food chicken chain Bojangle’s.
Casper also announced that Emilie Arel, who serves as president and chief commercial officer at Casper, has been appointed chief executive officer, assuming that role from Casper co-founder Philip Krim, who has been the face of the company.
In addition, Casper announced financial results for its third quarter, ended Sept. 30, that showed the company’s net loss increasing by $9.4 million to $25.3 million, inclusive of a $2.4 million one-time lease write-off charge. Revenues increased 26.8% to an all-time quarterly record of $156.5 million.
Commenting on the third quarter 2021 results and proposed transaction, Krim said: “Our strong top-line growth of 26.8% and ability to onboard additional world-class retail partners, such as Sleep Country, continues to underscore the strength of our brand and value proposition of our award-winning mattresses and sleep products. However, ongoing industry-wide supply chain challenges are resulting in sustained inflationary pressures across the industry, impacting our ability to meet demand effectively and efficiently and impairing the company’s liquidity position.
“Casper’s Board of Directors, in consultation with outside advisors, has evaluated a range of strategic and financial alternatives over several months and determined after careful consideration that the transaction proposed by Durational is superior to all other alternatives available,” Krim continued. “The proposed acquisition offers shareholders immediate and substantial value, and ensures the business has the financial flexibility required to support continued growth. In addition, Durational is committed to building on the strength of the Casper brand, products, omni-channel platform and employees to further improve the customer experience and create new opportunities for Casper.”
Commenting on her appointment, Arel said: “I am excited to take on the chief executive role at this time of change at Casper. Philip and the founding team disrupted the mattress industry by introducing a new type of shopping experience and built a beloved brand with award-winning products and approximately $500 million in annual sales. Under Durational, Casper will have financial flexibility to accelerate our growth plans, and I look forward to working closely with Durational and with all of Casper’s talented team members to deliver on the tremendous potential of this business in the months and years ahead.”
Casper went public early in 2020.