Soho House Goes Private: A Strategic Retreat to Preserve Exclusivity

Trading Velvet for Cash: What Soho House Going Private Means for the Brand and the Community

A Soho House Insider Exclusive

The news that has dominated the creative chatter, from Shoreditch to Soho Beach House Miami, is official: Soho House & Co Inc. (SHCO) is leaving the public markets. After four tumultuous years as a publicly traded entity, the global membership platform has signed a definitive agreement to go private in a mammoth deal that values the enterprise at approximately $2.7 billion.

This isn't just a financial transaction; it's a strategic retreat aimed at protecting the very soul of the club, which many felt was being eroded by the demands of Wall Street.

The Retreat: Why We're Ditching the NYSE

When the parent company, formerly Membership Collective Group (MCG), went public in 2021, the stock debuted at $14 per share. Since then, the [1] financial performance has been under intense pressure, with the valuation nearly halving before the buyout offer. Despite delivering [2] consistent revenue growth and impressive Adjusted EBITDA increases between 2022 and 2024, the core paradox remained [3]: How do you maintain the "highly public exclusivity" of a private club while dealing with the expensive requirements and constant scrutiny of being public?

The answer, apparently, is: You don't.

The situation came to a head following a scathing short-seller report from GlassHouse Research in February 2024, which declared that SHCO had a "broken business model and terrible accounting," putting its viability at risk. Although the company [2] [4] "fundamentally rejects" these claims, the damage was done. [5] The need to generate profit to satisfy public investors clashed directly with the core member experience. Long-time patrons complained [6] that rapid expansion had diluted the brand, leading to overcrowding and service issues, confirming the widely debated concern [6] [6]: Exclusivity and scale just don't mix.

The New Inner Circle: MCR, Apollo, and the Tech Investor

The transaction is being led by an investor group, confirming that the future of SHCO lies firmly in the hands of seasoned hospitality operators and financial heavyweights.

The Financial Backers and Operators

1. MCR Hotels Takes the Lead: The investor group is spearheaded by MCR Hotels, noted as the third-largest hotel owner-operator in the U.S. MCR's CEO and Chairman, Tyler Morse, is joining the Soho House Board of Directors as Vice Chairman. Morse sees this as a "strategic opportunity to combine [MCR's] operational expertise with one of the most distinctive brands in hospitality".
2. Apollo and Goldman Sachs [7]: The deal is backed by substantial financing, including a hybrid capital solution from funds managed by affiliates of Apollo. Apollo is providing over $700 million in equity and debt financing, including a large senior secured facility. Goldman Sachs Alternatives [8] [7], an existing shareholder, is also continuing its financial support and rolling the majority of its stake.
3. The Hollywood Influence [8]: Adding a signature Soho House touch, actor and technology investor Ashton Kutcher is leading a consortium of new strategic investors and will also join the Board of Directors.

The Controlling Stake Remains [7]

Crucially, this is not a complete external takeover. The original power players are retaining their control, ensuring the brand ethos remains anchored:

• Executive Chairman Ron Burkle and The Yucaipa Companies LLC are rolling their controlling equity interests to retain majority control of the business.
• Founder Nick Jones [7] and major shareholder Richard Caring are also rolling over the majority of their shares. [7]

The Bottom Line: Shareholders and Legal Battles

For unaffiliated stockholders, the transaction offers $9.00 per share in cash, representing an 83% premium over the share price prior to the initial offer announcement in December 2024.

However, the deal structure [9], heavily involving controlling shareholders like Ron Burkle and Yucaipa, has triggered investigations by numerous shareholder rights litigation firms. These investigations are primarily concerned with potential breaches of fiduciary duty due to the controlling influence of Burkle and Yucaipa, who collectively hold 62.3% of the voting power.

Activist investor Dan Loeb [10] [11], who held a 9.9% stake, had previously pushed back against a take-private plan, labeling it a "sweetheart deal" due to Burkle's "obvious conflicts of interest and undue influence". Loeb's criticism highlights [12] concerns about the fairness of the sales process and the potential for better offers if a more open and competitive bidding process were pursued.

Despite the controversy [13], the Special Committee of the board, composed of independent directors, found the $9.00 per share offer to be advisable and fair to stockholders. The committee, advised by independent legal and financial advisors, unanimously recommended the transaction. The merger is expected to close by the [14] end of 2025, after which SHCO's common stock will cease trading on the New York Stock Exchange. [15]

Looking Ahead: The Private Future

CEO Andrew Carnie noted that returning to private ownership will allow the Group to accelerate operational efficiencies and expand the club portfolio without the burdens of public-market scrutiny. This shift is expected to free management to focus solely on service quality, the "member experience," and sustainable international growth.

In a simultaneous [16] move that signals a renewed focus on corporate health, the company also announced the appointment of Neil Thomson as the new Chief Financial Officer, effective August 18, 2025, succeeding Thomas Allen. Thomson brings a wealth of experience from his previous role as CFO at Tasty Restaurant Group, and his expertise is expected to be instrumental in scaling the business.

The goal now is [17] [18] to recapture the club's "cultural clout" and focus on the original mission: creating a home for creative people to come together and belong. The fate of the empire, which operates 46 Soho Houses, eight Soho Works locations, and global brands like The Ned and Scorpios, is now back behind the private doors it started behind in 1995. [19] [20]