May 8, 2021

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Soho House plans to list in New York with a valuation of $ 3 billion

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Soho House, the private member’s club group, plans to join New York City as early as next month to capitalize on investor appetite for travel and leisure as the pandemic abates.

The company intends to join the exchange at a valuation of up to $ 3 billion, despite shutting down due to coronavirus restrictions at 11 of its 27 clubs in Europe, Asia and the United States, according to people familiar with it. with matter.

Speculation that the target price will rise from a valuation of $ 2 billion set in a $ 100 million funding round, led by its majority shareholder, US billionaire Ron Burkle in June of last year, is based on the anticipation of a boom in demand for travel documents.

The hotel group, which also owns 20 restaurants, 16 spas and two cinemas, declined to comment on the plans, first reported in The Times.

Shares of the Marriott hotel company have risen 26% since February, while Airbnb’s share price has risen more than 40% since its listing in December.

Despite sharp drops in revenue following site closures, Soho House has managed to keep over 90% of its paid members during the pandemic. A typical annual subscription costs £ 1,750.

However, recently filed accounts from Soho House show that the company stopped paying interest on its cash loan last year, choosing to use a “payment in kind” option instead. This allows businesses with limited cash flow to pay lenders with more debt instead.

Permira Debt Managers, the credit arm private equity firm, originally made the £ 350million loan to the private members’ club in 2017, describing the debt deal as its’ biggest direct loan investment ever ‘at the time .

The private debt deal came two years after Soho House had to to abandon a sale of £ 200million high yield bonds as investors hesitated over the company’s high leverage and limited free cash flow.

This is the second time Soho House has offered an IPO.

He withdrew a planned New York listing in 2018, saying he did not need to raise capital as it had the backing of Permira and its owners – who include Burkle, hospitality entrepreneur Richard Caring and Soho House founder Nick Jones – didn’t want to sell.

Jones, who opened his first Soho House in 1995, Told the Financial Times last year that the group did not need to consider a listing because “there is a strong demand from people to invest in the company as it is.”

Over the past 26 years, Soho House has grown rapidly, becoming a hotspot for celebrity guests targeting wealthy city dwellers in the creative industries.

According to his 2019 accounts, he made £ 293million in income, of which 49% came from the sale of food and drink and 20% from member subscriptions, with the rest from his own line of household items. . He reported a pre-tax loss of £ 77million.

During the pandemic, the group was forced to lay off 1,000 of its 8,000 employees.



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