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Casper Sleep is up 90% on Monday morning: this is why

By:
on Nov 15, 2021
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  • Durational Capital Management to buy Casper Sleep at $6.90 per share.
  • The PE firm will take Casper private once the transaction is complete.
  • Emilie Arel to replace Philip Krim as the CEO, effective immediately.

Shares of Casper Sleep Inc (NYSE: CSPR) are up more than 90% on Monday after Durational Capital Management said it will buy the mattress maker at an about 94% premium on the price at which its stock closed on Friday.

Durational to take Casper Sleep private

The private equity company has valued Casper Sleep at $6.90 per share. The transaction is expected to complete in the first quarter of 2022, upon which, Durational plans on taking the sleep products company private, less than two years after it debuted on the New York Stock Exchange.

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According to Casper’s co-founder and CEO Philip Krim, the deal with Durational is the right step for future growth.

This agreement offers a promising opportunity to realise the highest value for our stockholders while providing Casper with much-needed capital to execute on future initiatives to sustain and grow its business.

Board recommends shareholders accept the proposal

Casper’s board is unanimously in favour of Durational’s proposal and recommends that shareholders accept it. In related news, the president and chief commercial officer, Emilie Arel, will be replacing Philip Krim as the CEO, effective immediately.

Also on Monday, Casper Sleep said its net loss in the fiscal third quarter came in nearly 60% up on a year-over-year basis despite an about 30% increase in revenue, as per the earnings press release.

Revenue from its retail partnerships was up close to 79% in the recent quarter, while Direct-to-Consumer revenue jumped only 6.7% on an annualised basis. Casper Sleep valued its cash and cash equivalent as of September 30th at $43.1 million.

As a private business, Casper Sleep was once valued at $1.10 billion versus about $275 million only at the time of writing.