SCHEDULE: Soho House & Co Inc. Goes Private in $9.00/Share Deal

Sentiment:

Merger Agreement & Shareholder Support 18 August 2025 6:43 AM

Soho House & Co Inc. announces a definitive merger agreement to go private at $9.00 per share, backed by key shareholders rolling over equity and providing voting support.

Capital raiseEquity Investors have committed an aggregate amount of $264,600,000 in equity financing for the merger.Lenders, including entities controlled, managed, and/or advised by Apollo Capital Management, L.P. and Goldman Sachs Asset Management L.P., have committed to provide $845,000,000 in debt financing.The Company is obligated to contribute no more than $67,000,000 in balance sheet cash to fund the merger consideration.The Company has an obligation to use reasonable best efforts to obtain 'Incremental Equity Funding' after the date of the agreement, which could allow Richard Caring to receive more cash for his shares instead of rolling them over.

Summary

Soho House & Co Inc. (the Company) has entered into a Merger Agreement dated August 15, 2025, with EH Parent LLC (Parent) and EH MergerSub Inc. (Merger Sub), a wholly-owned subsidiary of Parent.
Merger Sub will merge into the Company, with the Company surviving as a private entity.
The Company Board, acting on the recommendation of a Special Committee, determined the merger and related transactions are fair and in the best interests of the Company and its stockholders, including Unaffiliated Company Stockholders.
Each outstanding share of Company Common Stock (excluding Owned Company Shares, Rollover Shares, Dissenting Company Shares, and certain Class A shares) will be converted into the right to receive $9.00 in cash per share (the Per Share Price).
Certain vested stock appreciation rights (SARs) and restricted stock unit (RSU) awards will be paid in cash or Class A Common Stock, while other unvested awards will continue with Class A Common Stock substitution.
Key shareholders, including Nick Jones, Richard Caring, Ronald Burkle, and various Yucaipa entities (collectively, Reinvestment Stockholders), have entered into Rollover and Support Agreements.
Reinvestment Stockholders commit to vote their Owned Shares in favor of the merger and against any competing acquisition proposals.
Specific numbers of shares held by Reinvestment Stockholders are designated as 'Rollover Shares' (e.g., Nick Jones: 1,274,556 Class A, 4,367,615 Class B; Richard Caring: 336,397 Class A, 37,024,497 Class B; Yucaipa Group: 200,000 Class A, 91,594,440 Class B). These Rollover Shares will retain ownership interests in the surviving company.
The transaction is financed by $264,600,000 in equity commitments from Equity Investors and $845,000,000 in debt financing from lenders including Apollo Capital Management and Goldman Sachs Asset Management.
The Company is required to contribute no more than $67,000,000 in balance sheet cash to the transaction.
Ronald Burkle entered a Letter Agreement with Nick Jones to purchase 4,400,000 Class B Common Stock from Jones for $6.00 per share, totaling $26,400,000. An additional $6,600,000 ($1.50 per share) will be paid to Jones if the merger closes within 12 months of this share sale.
Richard Caring's Rollover Side Letter allows for a reduction in his Rollover Shares (converting them to cash at $9.00/share) if the Company secures 'Incremental Equity Funding' up to $111,791,657, and then an additional $56,743,281.
The Voting Group, comprising Nick Jones, Richard Caring, Ronald Burkle, and Yucaipa entities, collectively beneficially owns 73.5% of the Class A Common Stock outstanding (on a converted basis) and controls over 90% of the combined voting power.
Post-closing, a new Voting Agreement will establish the governance framework, transfer provisions, and liquidity rights for the Company and its stockholders.

Sentiment

Score: 7

Explanation: The filing outlines a definitive merger agreement with strong shareholder support and secured financing, indicating a clear path to going private. The terms are deemed fair by the Special Committee. However, the delisting will remove public trading access, and the significant debt raise introduces leverage. The contingent payment to Nick Jones could be viewed as a potential governance concern.

Positives

The Company Board and Special Committee have determined the merger is fair and in the best interests of the Company and its stockholders, including Unaffiliated Company Stockholders.
Significant equity and debt financing commitments totaling over $1.1 billion have been secured, providing a clear funding path for the transaction.
Key shareholders, including the founder and major investors, have committed to roll over their equity and vote in favor of the merger, indicating strong internal support and increasing the likelihood of successful completion.
The transaction offers a definitive cash exit at $9.00 per share for non-rollover shareholders, providing liquidity and certainty.
Richard Caring will be reimbursed up to $300,000 for certain reasonable and documented out-of-pocket costs and expenses related to the merger agreements.

Negatives

The Company's Class A Common Stock will be delisted from the New York Stock Exchange and deregistered, ending public trading and liquidity for public shareholders.
The transaction involves a substantial increase in debt, with $845,000,000 in new debt financing, which could increase the Company's leverage and financial risk post-merger.
The Letter Agreement between Ronald Burkle and Nick Jones includes a contingent payment to Jones of an additional $6,600,000, which could be perceived as preferential treatment for an insider.
The 'Drag-Along Right' allows certain major shareholders to force other shareholders to sell their shares in a Change of Control transaction, potentially limiting the flexibility of minority shareholders.

Risks

The merger is subject to the affirmative vote of the holders of a majority of the voting power of all outstanding Company Common Stock and a majority of votes cast by Unaffiliated Company Stockholders.
Consummation of the merger depends on the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The merger could be prevented or delayed by any law, injunction, judgment, or order issued by a governmental authority.
The Buyer Parties' obligations to consummate the merger are contingent on the prior or substantially concurrent funding of the Debt Financing.
The merger is subject to the accuracy of the Company's representations and warranties, with potential for non-consummation if inaccuracies lead to a Company Material Adverse Effect.
Parent may terminate the Merger Agreement if the merger is not consummated by February 15, 2026 (subject to agreed extensions).
Reinvestment Stockholders acknowledge that investment in Parent involves a high degree of risk, including the risk of a complete loss of investment.
The ability of Richard Caring to convert more of his Rollover Shares to cash is contingent on the Company securing 'Incremental Equity Funding', which is not guaranteed.

Future Outlook

The Company is set to go private through a merger, leading to the delisting of its Class A Common Stock from the NYSE and subsequent deregistration. A new Voting Agreement will govern the Company's post-closing operations, including its corporate governance, share transfer rules, and shareholder liquidity rights. There is a provision for a potential Qualified IPO process to be initiated by Richard Caring after two years from the merger's effective date, subject to certain shareholding thresholds and Board discretion.

Management Comments

The Company Board, acting on the recommendation of the Special Committee, determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Support Agreements, are fair to, and in the best interests of, the Company and the Company Stockholders, including the Unaffiliated Company Stockholders.
The Company will use its reasonable best efforts to obtain additional equity funding after the date of the agreement.

Industry Context

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Irrevocable Proxy	NA	Benedict Nwaeke and Andrew Carnie	August 15, 2025	Appointed by Reinvestment Stockholders to vote Owned Shares in favor of the merger.
Chairman of the Board	NA	Ronald Burkle	Effective Date of Voting Agreement	Designated as Initial Chairman in the new governance framework.
Vice Chair of the Board	NA	Tyler Morse	Effective Date of Voting Agreement	Designated as Initial Vice Chair in the new governance framework.
Board Director (Yucaipa Designee)	NA	Ronald Burkle	Effective Date of Voting Agreement	Initial designation as part of the new Board composition.
Board Director (Yucaipa Designee)	NA	NA	Effective Date of Voting Agreement	Two additional Yucaipa Designees are part of the initial Board composition, names not specified in the provided text.
Board Director (MCR Investor Designee)	NA	Tyler Morse	Effective Date of Voting Agreement	Initial designation as part of the new Board composition.
Board Director (MCR Investor Designee)	NA	Joseph Delli Santi	Effective Date of Voting Agreement	Initial designation as part of the new Board composition.
Board Director (Designated Director)	NA	Ashton Kutcher	Effective Date of Voting Agreement	Initial designation as part of the new Board composition.
Board Director (RC Director)	NA	Richard Caring	Effective Date of Voting Agreement	Initial designation as part of the new Board composition.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Merger Approval Process	The Company Board, acting on the recommendation of a Special Committee, approved the Merger Agreement and related transactions, deeming them fair and in the best interests of stockholders, including Unaffiliated Company Stockholders.	August 15, 2025	Ensures proper fiduciary oversight and stakeholder consideration in the going-private transaction.
Shareholder Voting Commitment	Reinvestment Stockholders irrevocably agree to vote their Owned Shares in favor of the Merger Agreement and against any competing acquisition proposals, and grant irrevocable proxies to Benedict Nwaeke and Andrew Carnie for this purpose.	August 15, 2025	Significantly increases the certainty of shareholder approval for the merger, reducing execution risk.
Post-Closing Governance Framework	A new Voting Agreement will be entered into at the Closing of the Merger, setting forth the post-closing governance framework, transfer provisions, and liquidity rights for the Company and its stockholders.	Upon Closing of Merger	Establishes a new corporate governance structure for the private entity, defining shareholder rights and obligations.
Board Composition and Director Designation Rights	The Board will initially comprise seven directors: three Yucaipa Directors, two MCR Directors, one Designated Director (Ashton Kutcher), and one RC Director (Richard Caring). Specific thresholds for share ownership determine the retention of director designation rights.	Effective Date of Voting Agreement	Defines the power balance and representation on the Board among key investor groups post-merger.
Board Decision-Making & Consent Matters	Certain matters require affirmative Board approval (e.g., adopting the Approved Budget, Change of Control, IPO, equity issuance, debt, dividends, executive hiring/termination, litigation). Specific matters also require Yucaipa's written approval (e.g., material organizational document amendments, equity issuance, large debt/capex, C-suite hiring/termination, IPO, fundamental business changes). Affiliate transactions involving Yucaipa or MCR Investor require approval from a majority of disinterested and independent directors.	Effective Date of Voting Agreement	Establishes clear decision-making protocols and provides significant control rights to Yucaipa and other major shareholders over strategic and financial matters.
Waiver of Corporate Opportunity	Shareholders and their affiliates (including directors/officers) generally have no duty to present corporate opportunities to the Company, unless the opportunity is expressly offered in writing solely to an officer or Director in their capacity as such.	Effective Date of Voting Agreement	Allows shareholders and their affiliates to pursue business opportunities outside the Company without breaching fiduciary duties, potentially diverting opportunities from the Company.
Indemnification and Exculpation	The Company will indemnify and hold harmless Indemnitees (including shareholders, directors, officers, and their affiliates) from liabilities arising from their ownership or control of the Company, or its business, to the fullest extent permitted by law, except for willful breach. The Company is primarily responsible for Jointly Indemnifiable Claims.	Effective Date of Voting Agreement	Provides strong protection for key individuals and entities involved with the Company, potentially increasing the Company's financial exposure to legal costs.
Share Transfer Restrictions and Rights	Restrictions on transfer of Company Securities are in place, with specific permitted transfers (e.g., to Permitted Transferees, after December 31, 2026, via Right of First Offer (ROFO) or Drag-Along rights). ROFO and Tag-Along rights are established for certain share sales, and Drag-Along rights allow certain shareholders to force a Change of Control transaction.	August 15, 2025 (for restrictions); Effective Date of Voting Agreement (for specific rights)	Manages liquidity and control over the Company's ownership structure, providing mechanisms for major shareholders to consolidate or exit their positions.
Confidentiality and Non-Disparagement	Shareholders are obligated to keep Confidential Information strictly confidential and are subject to a non-disparagement clause for 24 months post-shareholder status.	Effective Date of Voting Agreement	Protects proprietary information and the reputation of the Company and its key stakeholders post-privatization.

Related Party Transactions

The merger itself is a related-party transaction, as EH Parent LLC (Parent), the acquiring entity, has Yucaipa American Alliance Fund II, L.P. as its sole member, and Ronald Burkle, a director and Executive Chairman of Soho House, is the controlling partner of an affiliate of the Yucaipa Funds.
Ronald Burkle (Executive Chairman and director) entered into a Letter Agreement with Nick Jones (founder and director) to purchase 4,400,000 Class B Common Stock shares for $26,400,000, with a contingent additional payment of $6,600,000 if the merger closes within 12 months.
Richard Caring (director) will receive reimbursement of up to $300,000 for certain reasonable and documented out-of-pocket costs and expenses incurred in connection with the merger agreements.
The Voting Agreement includes provisions for 'Affiliate Transactions' (transactions with any Shareholder or an Affiliate of any Shareholder) that require the affirmative approval of a majority of the disinterested and independent directors on the Board, unless they fall under specific exemptions (e.g., transactions under $120,000, ordinary course services, pre-approved transactions on Exhibit C).

Stakeholder Impact

Shareholders: Unaffiliated public shareholders will receive a cash payment of $9.00 per share, providing a clear exit and liquidity. Reinvestment Stockholders will roll over their equity, maintaining an ownership interest in the private entity and participating in its future performance.
Employees/Officers: Certain vested stock awards will be converted to cash or Class A Common Stock, while other unvested awards will continue with Class A Common Stock substitution. The new corporate governance structure defines roles and responsibilities for executive management.
Creditors: Existing notes owned by affiliates of Goldman Sachs Asset Management L.P. will be repaid. The Company will incur $845,000,000 in new debt, which will alter its capital structure and leverage profile.
Management: The new governance framework outlines specific consent rights for key shareholders regarding the hiring and termination of C-suite officers, impacting management's autonomy.
Regulatory Bodies: The transaction requires compliance with regulatory approvals, such as the Hart-Scott-Rodino Antitrust Improvements Act, and ongoing SEC filings until delisting and deregistration.

Next Steps

The adoption of the Merger Agreement will be submitted to a vote of the Company Stockholders at the Company Stockholder Meeting.
The merger requires the affirmative vote of a majority of the voting power of all outstanding Company Common Stock and a majority of votes cast by Unaffiliated Company Stockholders.
The applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 must expire or terminate.
The Debt Financing must be funded prior to or substantially concurrently with the merger's consummation.
Upon consummation of the merger, the Company's Class A Common Stock will be delisted from the New York Stock Exchange.
Following delisting, the Company's Class A Common Stock will be deregistered pursuant to the Securities Exchange Act of 1934.
A new Voting Agreement will be executed at the Closing of the Merger to establish the post-closing governance framework, transfer provisions, and liquidity rights.
The Company will use reasonable best efforts to obtain additional equity funding ('Incremental Equity Funding') after the date of the agreement.
Ronald Burkle's purchase of 4,400,000 Class B shares from Nick Jones is conditioned on the filing of a definitive proxy statement and confirmation from the Company's Chief Legal Officer.
A contingent payment of $6,600,000 from Ronald Burkle to Nick Jones is due if the merger closes within 12 months of the share sale.
The Company will enter into a registration rights agreement with shareholders in connection with a potential future IPO.
The Company will prepare and submit an annual budget to the Board for review and approval prior to the end of each fiscal year.

Key Dates

Date	Description
July 19, 2021	Issuer's initial public offering (IPO) closed.
August 14, 2025	Date for calculation of outstanding Class A Common Stock (53,604,734 shares) and Class B Common Stock (141,500,385 shares held by Voting Group).
August 15, 2025	Date of the Merger Agreement, Rollover and Support Agreements, Voting Agreement Side Letters, and Letter Agreement between Ronald Burkle and Nick Jones.
February 15, 2026	Outside date for merger consummation (subject to extension).
December 31, 2026	Date from which any Shareholder may transfer shares without Board or other Shareholder consent (subject to Right of First Offer/Tag-Along rights).
June 30, 2028	Date by which Yucaipa provides notice on whether the Consolidated Adjusted EBITDA Threshold is reasonably expected to be met.
December 31, 2028	Trigger Date for Drag-Along Right based on Consolidated Adjusted EBITDA Threshold (or 45 days after, if later).
December 31, 2029	Measurement Period end date for the Second Extension of the Voting Agreement (or 45 days after, if later).
December 31, 2030	Termination date for the Voting Agreement if the Second Extension occurs.

Recommendation

hold

The filing details a definitive merger agreement to take the company private at $9.00 per share. For existing public shareholders, this represents a fixed exit price. Given the advanced stage of the transaction with significant shareholder support and financing commitments, the likelihood of the merger closing appears high. Therefore, holding shares to receive the $9.00 cash consideration is the most straightforward strategy for current shareholders. There is no indication of a higher offer or significant downside risk to the deal closing at the stated price, making 'hold' appropriate for those seeking the announced exit.

Keywords

Soho House, Merger Agreement, SEC Filing, Private Equity, Shareholder Support, Rollover Shares, Going Private, Hospitality, Luxury Clubs, Ronald Burkle, Yucaipa, Richard Caring, Nick Jones, Class A Common Stock, Class B Common Stock, Debt Financing, Equity Financing, Corporate Governance, Schedule 13D

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