Mattress firm Casper to be taken private by PE firm Durational Capital Management in a deal valuing the company at roughly $286 million

• Mattress company Casper will be acquired and taken private by PE firm Durational Capital Management.
• The deal values it at a roughly 94% premium, putting its value at roughly $286 million.

The direct-to-consumer sleep company Casper will be acquired and taken private by private equity firm Durational Capital Management, the company announced Monday morning.

The deal values the company at a roughly 94% premium to its closing price on Friday, November 12, putting the value of the company at roughly $286 million, per Insider's calculation.

Casper's stock closed Friday at $3.55 per share. Durational Capital has agreed to pay $6.90 for each Casper share outstanding, the company said in a press release.

"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," said Casper co-founder and CEO Philip Krim.

Krim said the company evaluated a range of strategic and financial alternatives with outside advisors and Casper's board before deciding that this one was the best choice.

Casper separately reported revenue of $156.5 million in its third-quarter earnings, up 26.8% year-over-year. But the topline growth wasn't enough to stanch the company's losses since its February 2020 IPO. It reported $25.3 million in net losses Monday. The company said it would not be conducting its third-quarter 2021 conference call and webcast, previously scheduled for 5 p.m. ET on November 15. It plans to file its quarterly report with the Securities and Exchange Commission.

Rumors have swirled of a possible deal in recent weeks. The acquisition comes on the heels of Casper disclosing plans to raise capital through a variety of securities offerings in an S-3 filing on Oct. 25 as it bled through cash, as Insider first reported.

Casper also worked with management consulting firm AlixPartners as it explored multiple financing options and looked to restructure its business and cut costs, three sources with direct knowledge of the firm's involvement told Insider previously.

Casper's board has unanimously approved the transaction. The transaction is expected to close in the first quarter of 2022 and is not subject to a financing condition. Durational has committed debt financing led by KKR Credit and Callodine Commercial Finance, LLC.

Casper shares shot up more than 92% to $6.82 in premarket trading Monday following the news. Competitors Tempur-Sealy International and Sleep Number are both up less than 1%.

Ongoing losses have become commonplace in the venture-backed startup world, epitomized by the likes of Uber and Lyft continuing to post losses in the year since they've gone public. While investors in such tech companies stick around in hopes they'll eventually dominate the market and turn profits, Casper's falling stock price in a competitive and otherwise profitable mattress industry seemed to signal declining investor confidence.