Casper Sleep nets financing commitment as part of take-private sale

Casper Sleep Inc. agreed to be acquired by Durational Capital Management LP in a take-private transaction, the companies said. KKR Credit and Callodine Commercial Finance LLC committed to debt financing to support the transaction.

Casper common stockholders will receive $6.90 per share, representing a 94% premium to the Nov. 12 closing share price, according to a Nov. 15 statement.

The company will receive $30 million in bridge financing as part of the transaction. Interest on the bridge loans is 6.75% over a prime rate. The loans feature an upfront fee of 1% of the funded amount and an end-of-term fee of 10% of the funded amount.

Terms include a success fee of $150,000 if the merger closes by Jan. 15, 2022, and $300,000 if it closes after that date. If the merger doesn't close by March 15, 2022, the company must issue common stock warrants to the bridge loan lenders with warrants equal to 40% of the outstanding amounts under the bridge loans.

The company and affiliates agreed to amend a subordinated credit facility with TriplePoint Venture Growth BDC, the lender and collateral agent, and TriplePoint Capital LLC, the lender, allowing for the new loans.

At the same time, the company entered a waiver and amendment with Wells Fargo, allowing for the bridge loans, among other things.

The company released third-quarter earnings at the same time. Revenue increased 27% to $156.5 million, a quarterly record, in the three months ended Sept. 30, versus the third quarter of 2020. Adjusted EBITDA totaled a loss of $12.1 million, versus a loss of $7.5 million. The company withdrew guidance in light of the transaction.

The company appointed Emilie Arel, president and chief commercial officer, as CEO, succeeding Casper co-founder Philip Krim.

Casper designs and manufactures mattresses, pillows, bedding and furniture. It sells products through an e-commerce business, its owned and operated Sleep Shops and retailers.