Samurai Messenger Service is preparing to deliver a packed mattress from bed delivery company Casper in New York.
Yana Paskova | Washington Post | Getty Images
Casper Sleep announced on Monday that it will be acquired by private equity firm Durational Capital Management as part of a deal that rates the mattress maker at about a 94% premium to Friday’s closing price.
Casper shares closed Friday at $ 3.55 a share. Durational Capital has agreed to pay $ 6.90 for each Casper share issued, the company said. Casper shares rose more than 94% in premarket Monday following the news.
“This agreement offers a promising opportunity to realize the highest value for our shareholders while providing Casper with much-needed capital to pursue future initiatives to sustain and grow its business,” said Casper Co-Founder and CEO Philip Krim.
Krim said the company spent months talking to external consultants and Casper’s advice to evaluate a range of financial alternatives before deciding which was the best choice.
Casper’s board unanimously supports Durational’s proposal and recommends that shareholders approve the deal, he said.
The deal is expected to close in the first quarter of 2022.
Emily Arel, President and Chief Commercial Officer of Casper, is also expected to take over as CEO from Krim with immediate effect.
When Casper went public in February 2020, the company priced its IPO at $ 12 a share and began trading on the New York Stock Exchange at $ 14.50, receiving a valuation of around $ 575 million. However, Casper was once valued as a private business at $ 1.1 billion.
The company, which sells its products directly to consumers as well as through wholesalers such as Target, has seen its value decline since its public debut. Casper’s market capitalization was around $ 147 million as of Friday.
Founded in 2014, Casper has pioneered the so-called direct-to-consumer movement, which includes eyewear retailer Warby Parker and the Allbirds sneaker brand. But Casper faced challenges of its own in an increasingly competitive mattress category and struggled to make money even after opening dozens of outlets.
The company said Monday that its losses in the third quarter ended September 30 increased to $ 25.3 million, or 61 cents a share, from a loss of $ 15.9 million, or 40 cents a share, a year earlier.
Find the full Casper press release here…