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11/15/2021

Casper Sleep to be acquired by Durational Capital Management; CEO out

Marianne Wilson
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Casper Sleep is being taken private by private equity firm Durational Capital Management.

Casper Sleep Inc. is going private — and doing so with a new chief executive.

The direct-to-consumer bedding and furniture company is set to be acquired by Durational Capital Management LP. The purchase price of $6.90 per share represents a 94% premium to the closing share price on Friday, November 12, 2021.  But the price represents a big discount from the $575 million valuation Casper got when its shares started trading at $13.50 when the company went public in February 2020.

The deal is expected to be completed in the first quarter of 2022.

The company said that its board had evaluated a range of strategic and financial alternatives during several months and determined, after careful consideration, “that the transaction proposed by Durational is superior to all other alternatives available.”

The announcement came as the New York-based company posted a third-quarter net loss of $25.3 million, up 59.4% from the year-ago period, and said CEO Philip Krim, who co-founded Casper in 2014, had stepped down. Emilie Arel, who serves as president and chief commercial officer at Casper, has been appointed CEO, effective November 15.

“Emilie and I have worked together toward this goal for a long time and her new responsibilities reflect our focus on prioritizing talent development across the company,” said Krim. “Emilie’s background and experience at world-class brands including Quidsi, Gap and Target will be of great benefit to Casper – she is a leader who will take bold steps and work across departments to advance our strategic initiatives by leveraging the resources she has available and motivating those around her.”

Commenting on the acquisition by Durational Capital, Krim said the board unanimously supports the offer and recommends that shareholders approve the transaction.

“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,” he said.

Casper pioneered the mattress-in-a-box concept and is credited with helping to reenergize the entire mattress category. The company has expanded its offerings beyond mattresses in recent years to include pillows, bedding, furniture and more. Its products are available at a variety of retailers, ranging from Sam’s Club to Target. In July, it opened its first in-store shop, at Bed Bath & Beyond’s flagship in New York. In addition to its own e-commerce site, the brand also operates 72 stores. The company has struggled to turn a profit since it went public amid increased competition from other direct-to-consumers mattress companies.

Casper’s new CEO was previously the CEO of FullBeauty Brands, a plus-size apparel company, where she led the company through a debt restructuring. Prior to that, she served as the CEO of Quidsi, an Amazon company with 10 brands, including Diapers.com and Soap.com.

Earlier in her career, Arel spent seven years with Gap Inc. where she held multiple positions. Before joining Gap, Emilie held various roles at Target Corp.