Casper Sleep goes private less than half the original IPO


The struggling mattress maker Casper Sleep is being taken private – for less than half the price it ordered when it went public two years ago.

Bed-In-A-Box reached a deal Monday to acquire Durational Capital Management – a buying company that also owns the Bojangles Fried-Chicken chain – for $ 6.90 a share or $ 286 million.

The takeout price was a 94 percent premium to Friday’s Casper closing price. Shares of the company recently closed 88% higher at $ 6.65.

Nevertheless, it is a steep discount to the $ 1.1 billion Casper won in a private fundraiser in 2019. This is far below the $ 575 million value Casper received when its shares traded at $ 13.50 in February 2020 at $ 100 million. .

Casper – a hipster brand known in New York City for its clever subway advertising – is at the forefront of the bed-in-the-box trend. The company attracted well-known investors, including actor Ashton Kutcher and Leonardo DiCaprio.

Casper has been at the forefront of the Bed-in-a-Box trend but there have been several other start-ups since its launch in 2014.
Rachel Murray
Philip Krim, founder and chief executive of Casper, stepped down as CEO on Monday.
Philip Krim, founder and chief executive of Casper, stepped down as CEO on Monday.
Getty Images

However, it faced increasing competition from tens of start-ups and widespread skepticism about its IPO. In June 2020, a shareholder lawsuit was filed alleging that Casper had masked the fact that the company’s profit margins were narrowing and selling “old and outdated mattress inventory” at a clearance price.

Founder and Chief Executive Philip Krim – who began selling beds from his dorm room when he was a college student at the University of Texas – said he would step down as CEO immediately. Seven-year-old company president Emily Arel has been named CEO.

Casper Store with customer browsing.
Casper Stores sells other products in addition to its signature bed-in-a-box beds.
Toronto Star by Getty Images

“In consultation with outside consultants, the Caspers Board of Directors has evaluated a range of strategic and financial alternatives for several months and after careful consideration, Duraional has determined that the proposed business is superior to all available options,” Crim said in a statement.

In recent years, Casper has partnered with several retailers, including Target, to sell its mattresses. The company has expanded its products beyond beds, including bed linens, bed frames and dog beds.

Sales increased 27 percent to $ 156 million for the quarter ended Monday, September 30, but reported that its net loss expanded to $ 25 million from $ 16 million a year earlier.

Casper sign outside the store.
Casper operates its own stores and has partnered with other major retailers, including Target, to sell its products.
Gado by Getty Images

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