Mattress retailer, Casper Sleep, is going private in a deal with private equity firm Durational Capital Management, the company announced Monday.
The deal gives the company a nearly 94 percent premium on its Friday closing price of $3.55 per share, with the equity firm agreeing to pay $6.90 per unit.
“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.
Krim noted that the company was evaluating a range of options but the deal with Durational was the best choice. The company’s board unanimously supported the deal and recommended that shareholders approve it as well.
The announcement of the deal was received well in the stock market, with the company’s stock improving by 94 percent in premarket trading following the announcement. The deal is expected to close in the first quarter of 2022.
The direct-to-consumer (DTC) brand nabbed a valuation of $575 million when it was listed on the New York Stock Exchange in February 2020. Since then, the company has seen its valuation slip with growing competition from new entrants in the space. The brand has also struggled to make it’s brick-and-mortar business profitable. As of last week, the company had a market cap of just $147 million.
In Q3, the company reported that its losses had widened to $25.3 million, up from $15.9 million a year before.