Samurai Messenger Service prepares to deliver a packaged mattress from the bed delivery company Casper in New York.
Yana Paskova | The Washington Post | Getty Images
Casper Sleep announced Monday that it will be taken private by private equity firm Durational Capital Management in a deal that values the mattress maker at a roughly 94% premium to Friday’s closing price.
Casper’s stock finished Friday at $3.55 per share. Durational Capital has agreed to pay $6.90 for each Casper share outstanding, the company said in a press release. Casper shares shot up more than 85% in afternoon trading Monday following the news.
“This agreement offers a promising opportunity to realize the highest value for our stockholders while providing Casper with much needed capital to execute on future initiatives to sustain and grow its business,” said Casper co-founder and CEO Philip Krim.
He said the company had been talking to outside advisors and Casper’s board for several months to evaluate a range of financial alternatives, before deciding this one was the best choice.
Casper’s board unanimously supports the offer from Durational and recommends shareholders approve the transaction, Krim said.
The deal is expected to close in the first quarter of 2022.
Emilie Arel, Casper’s president and chief commercial officer, is also expected to take over the CEO position from Krim, effective immediately.
When Casper went public in February 2020, the company priced its IPO at $12 per share and started trading on the New York Stock Exchange at $14.50, nabbing a valuation of about $575 million. Still, Casper at one point had been valued at $1.1 billion as a private business.
The company, which sells its products directly to consumers and also via wholesalers such as Target, has watched its valuation tumble since its public debut. As of Friday, Casper’s market cap was about $147 million.
Casper, founded in 2014, was considered a pioneer of the so-called direct-to-consumer movement, which includes eyeglasses retailer Warby Parker and sneaker brand Allbirds. But Casper has faced its own struggles in an increasingly competitive mattress category and has struggled to make money, even after opening dozens of retail locations.
The company reported Monday that its losses in the third quarter ended Sept. 30 widened to $25.3 million, or 61 cents per share, from a loss of $15.9 million, or 40 cents a share, a year earlier.
Find the full press release from Casper here.