SCHEDULE: Soho House Amends Rollover Pact, Secures $100M Debt

Soho House & Co Inc. and its Reinvestment Stockholders, including Goldman Sachs entities, amended their Rollover Agreement, detailing post-merger equity funding and a $100 million debt facility.

Summary

• An amendment to the Rollover Agreement was executed on January 14, 2026, between Soho House & Co Inc. and its Reinvestment Stockholders, primarily Goldman Sachs entities.
• The amendment increases the number of Class A Common Stock designated as Rollover Shares by 1,552,556, bringing the total to 15,526,619 shares for the GS Entities.
• Soho House will use "reasonable best efforts" to secure Post-Closing Equity Funding for nine months after the merger closes.
• Reinvestment Stockholders have an option to redeem Class A Common Stock at $9.00 per share, utilizing 50% of the first $163,126,505 of net proceeds from Post-Closing Equity Funding, up to a maximum of 9,315,972 shares for the GS Funds.
• The first $70.0 million of Post-Closing Equity Funding and any equity for emergency working capital will not be used for this redemption.
• The GS Funds will provide Soho House Bond Limited (SHBL) with $100 million in new debt financing, an increase from the previously disclosed $75 million, replacing existing senior secured notes.
• The GS Funds are granted the right to appoint one non-voting board observer to the Surviving Corporation's board, contingent on maintaining at least 50% of their Class A Common Stock holdings nine months post-merger.
• The Goldman Sachs Group, Inc. beneficially owns 15,770,942 shares of Class A Common Stock, representing 29.1% of the class and approximately 1.1% of the aggregate voting power.

Sentiment

Score: 7

Explanation: The filing formalizes critical aspects of the merger financing and investor relations, including an increased debt facility and a structured equity funding plan. While the redemption option provides an exit for some investors, the overall clarity and progress towards merger completion are positive. The increase in debt is a consideration, but it's tied to the merger.

Positives

• Secures $100 million in new debt financing from GS Funds, an increase from the previously disclosed $75 million, which is crucial for the merger's completion and repayment of existing notes.
• The company commits to using "reasonable best efforts" to obtain post-closing equity funding, which could strengthen its balance sheet.
• The redemption option provides a potential liquidity event for Reinvestment Stockholders at a fixed price of $9.00 per share.
• The GS Funds' continued significant stake and board observer right suggest ongoing strategic interest and oversight.

Negatives

• The redemption option for Reinvestment Stockholders at $9.00 per share, while a positive for them, could imply a cap on immediate upside for other shareholders if the stock price significantly exceeds this value post-merger and funding.
• The commitment to raise equity funding post-merger could lead to dilution for existing shareholders if not managed carefully.
• The increase in debt financing, while necessary, adds to the company's leverage.

Risks

• Failure to obtain sufficient Post-Closing Equity Funding could impact the company's working capital needs and the Reinvestment Stockholders' redemption option.
• The terms of the merger and associated financing are complex and subject to various conditions.
• The company's ability to manage increased debt levels post-merger.

Future Outlook

Soho House & Co Inc. is committed to seeking additional equity funding for nine months post-merger closing to support working capital needs and potentially facilitate a share redemption for Reinvestment Stockholders. The merger itself is a significant forward-looking event.

Management Comments

• The Company agrees that it shall use its reasonable best efforts to obtain equity funding after the date the Merger closes through and including the date that is nine months following the Closing Date.
• The Company shall keep the undersigned reasonably informed on a current basis of the status of the Post-Closing Equity Funding (including material developments, timing, and key terms under consideration).

Industry Context

na

Corporate Governance

Related Party Transactions

• Certain GS Funds or their affiliates will provide Soho House Bond Limited (a wholly-owned subsidiary of Soho House & Co Inc.) with new debt financing in an aggregate principal amount of $100 million.
• The Reinvestment Stockholders, which include various Goldman Sachs entities (GS Funds), are parties to the amended Rollover Agreement and have the option to redeem shares.

Stakeholder Impact

• Shareholders: Potential dilution from future equity funding, but also clarity on merger financing. Reinvestment Stockholders gain a redemption option and board observer rights.
• Creditors: Existing senior secured notes will be repaid, and new debt financing will be provided by GS Funds, shifting the creditor base.
• Company (Soho House): Secures necessary financing for the merger and outlines a plan for post-closing equity, supporting working capital and strategic flexibility.

Next Steps

• Closing of the Merger.
• Company to use reasonable best efforts to obtain Post-Closing Equity Funding for nine months following the Closing Date.
• Potential redemption of Reinvestment Stockholders' Class A Common Stock within three business days of the closing of Post-Closing Equity Funding.
• Repayment of existing senior secured notes by SHBL upon merger closing.
• Provision of new $100 million debt financing by GS Funds to SHBL upon merger closing.

Key Dates

Recommendation

The filing provides crucial updates on the financing structure for the upcoming merger, including an increased debt facility and a mechanism for post-closing equity funding. While the $9.00 redemption price for certain shareholders offers a floor for a portion of their investment, the overall transaction aims to stabilize the company's financial position post-merger. The increase in debt is a consideration, but the clarity around the merger's financial path is generally positive. Given the ongoing merger process, a "Hold" recommendation is appropriate as investors await the full completion of the transaction and the execution of the post-closing funding strategy. The fixed redemption price for a significant portion of shares held by key investors suggests a potential valuation benchmark, but the broader market reaction will depend on the overall merger terms and future performance.

Keywords

Soho House, SEC filing, Rollover Agreement, Merger Agreement, Goldman Sachs, Equity Funding, Debt Financing, Class A Common Stock, Share Redemption, Corporate Governance, Schedule 13D, Investment