Less than two years after debuting on the public market, Casper Sleep (NYSE: CSPR) is set to revert back to being privately owned following the announcement of a buyout yesterday. The mattress company is set to be bought out by Durational Capital Management for the price of $6.90 a share, or $286 million in total.
The takeover price represents a premium of 94% on Casper's closing price last Friday. Since then, shares in the company have risen by over 88% to around the $6.66 mark. This price rise is almost ironic in a way, as the company had lost over 70% of its value since debuting in February 2020 prior to yesterday's takeover-induced spike.
The valuation of $286 million represents a steep fall-off from Casper's 2019 valuation of over $1.1 billion following private fundraising in 2019. The company was more reasonably valued at $575 million following its 2020 IPO, further highlighting just how much of a discount this acquisition really is.
For those wondering what will happen to their existing shares, current Casper Sleep investors will receive cash consideration of $6.90 per share owned, once the deal goes through some time in H1 2022.
Casper had quite a few issues to contend with before details of this purchase ever emerged. Competition is rife within the mattress market, and staging its IPO right before the world essentially got locked down was certainly an unfortunate situation for the company. However, losses continued to deepen for the firm up to the most recent quarter. Casper reported a loss of $0.61 per share in Q3, widening from $0.40 in the year-ago quarter.
The deal is expected to close in the first quarter of 2022. In a press release from the company, Co-Founder and CEO Philip Krim expressed that "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."
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