Casper is going private again, at a quarter of original IPO

Casper, the bed-in-a-box brand that at one point seemed to sponsor every true-crime podcast in America, said today that it’s being acquired by the private equity firm Durational and will exit the market worth roughly a quarter of what it debuted at during the peak of last year’s IPO.

Casper has struggled to turn a profit since that day—partly because of all the copycats that materialized in the direct-to-consumer mattress space, but also because, once you tally up all those podcast sponsorships and subway ads, there isn’t much profit left. It turns out the big winners of the new online mattress business are the middle people who make bank on commission.

When Casper went public in February 2020, it teased plans to expand beyond the original business model, direct-to-consumer boxed mattresses, into a chain of physical stores boasting a line of products that “promote the ideal ambience for sleep.” Those products were supposed to include bedside clocks, various sleep apps, even sleep supplements. (To date, though, the one popular bed-adjacent item it has managed to produce is a lamp called the Glow Light.) The public debut was poor enough—after an initial valuation of $1.1 billion, it landed down around $575 million, spawning headlines like “Casper’s IPO is officially a disaster.” But now, Durational is buying the whole company for roughly $286 million, less than what Trump International just sold its money-losing Washington hotel for.

Durational’s investments, according to its website, include the poultry producer Sanderson Farms, the Cajun-chicken chain Bojangles, and the racetrack Churchill Downs. It has agreed to pay a roughly 94% premium on Friday’s closing price. The deal is expected to close in the first quarter of 2022.

The company reported Monday that it lost $25.3 million during the third quarter, compared to a $15.9 million loss for the third quarter in 2020. The company also announced that its president and chief commercial officer, Emilie Arel, has been appointed CEO, taking over from Casper cofounder Philip Krim. Krim tells CNBC they’ve spent months debating the best foot forward financially and have decided this “was the best choice.” The Casper board gave its unanimous support to Durational’s offer and says shareholders should approve it.