Casper has been acquired by private equity firm Durational Capital Management and Emilie Arel, Casper’s president and chief commercial officer, is expected to take over the CEO position from co-founder and current CEO Phillip Krim, effective immediately.
Under the terms of the agreement, Casper common stockholders will receive cash consideration of $6.90 per share, representing a 94% premium to the closing share price on November 12, 2021
The retailer’s Board of Directors unanimously approved the transaction which is expected to close in the first quarter of 2022 and is subject to customary closing conditions, including Casper stockholder approval.
“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,” Krim says.
This comes on the heels of a cash shortage at the online mattress retailer, which posted a $90 million loss in 2020, which was only a little less than the $93 million loss in 2019 and the $92 million the year before that.
The company recently made a deal with Wells Fargo, its main lender, to agree to let its cash balances dip far below previously agreed-upon levels.
They also recently filed a shelf registration for a mix of stock and debt to raise $150 million—a move that would give the company three years to sell the underlying securities.
After Casper reached out to Wells Fargo, the bank agreed to waive the requirement that Casper had to maintain at least $32 million in cash in its bank account between now and the end of the year to avoid triggering a default notice.
As long as Casper gives Wells Fargo at least five days’ notice, it can lower its cash balance below $15 million.
Casper currently trades down 70% from its 52-week high and 40% below where it started the year. Year to date, it’s running a deficit of $55 million, which is only slightly less than the $59 million loss it posted through the first six months of 2020.