The Value of Private Members Networks: Why Investors Value The Network Effect

Simon Hawk
Sep 17
5 min read

In the world of M&A, not all assets are physical; some of the most valuable are intangible. Private members networks—exclusive clubs, subscription communities, membership platforms—are increasingly in the crosshairs of acquirers precisely because of what lies beyond real estate and fixed assets: namely brand, loyalty, recurring revenue, cultural cachet, and network effects. The recent acquisition of Soho House & Co. offers a case study in how these intangible drivers translate into valuation and strategic value.

Soho House: Key Facts of the Deal

A quick rundown of the Soho House acquisition and its financial context helps ground the analysis.

In August 2025, a group led by MCR Hotels agreed to take Soho House private in a deal valued at US$2.7 billion (including debt). Connect CRE+3Reuters+3CoStar+3
Shareholders were to receive US$9 per share in cash, representing a substantial premium over the recent trading price. Soho House+2Reuters+2
Major existing shareholders—such as Ron Burkle’s Yucaipa, Richard Caring, and others—are rolling over portions of their equity. Soho House+2CoStar+2
Soho House operates a global membership platform: dozens of “Houses,” beach clubs, hotel properties, and digital channels. Soho House+2CoStar+2

Soho House is more than real estate—it’s a global lifestyle brand, a membership network, and a curated culture.

What Drives the Value in Private Members Networks

From the acquisition lens, private members networks like Soho House are valuable for several overlapping reasons:

Recurring Revenue and Customer RetentionMembership fees, renewals, ancillary revenue (food & beverage, events, lodging, etc.) mean more predictable cash flow. High retention rates signal strong loyalty, reducing risk for the buyer.
Brand Equity and ExclusivityThe aura of exclusivity—often built through strict membership criteria, design, location, and culture—can allow premium pricing and margin. Such brands are hard to replicate overnight.
Network EffectsAs more high-value members join, the club becomes more attractive to others. Physical presence in multiple geographies amplifies this: members traveling globally benefit if there are Houses in many cities. It also helps with cross-selling.
Scale and Geographic DiversificationOnce you have a network of locations (Houses, clubs, hotels), you can spread fixed costs, replicate best practices, negotiate better supplier contracts, etc. Geographical reach helps hedge macro risks in any one market.
Intangibles: Culture, Community, CurationThe curated member experience, the sense of community, the design, the events, the reputation—they all matter and are hard for an acquirer to buy piecemeal. If managed well, they enhance customer loyalty, word-of-mouth, and ability to monetize not just spaces but experiences and content.
Upside via Operational ImprovementsMany acquirers believe there is operational leverage: better cost control, optimizing occupancy, increasing membership density (without hurting exclusivity), refining the events or content offering, integrating digital, etc.
Strategic Flexibility Post-AcquisitionGoing private (as Soho House is doing) allows focus on long-term strategic investments (e.g. in design, locations, culture) without the pressures of quarterly earnings and public market scrutiny. This can help preserve the essence of the members’ experience, which is often central to the brand.

How Soho House Illustrates These Value Drivers

Soho House shows many of the above in action:

Premium Paid for Intangible Value: The acquisition price at US$2.7B includes an 83% premium over certain prior closing stock prices. That premium reflects the belief among investors that Soho House's intrinsic value—brand, network, membership loyalty—was underappreciated by the public markets. Soho House+2Benzinga+2
Strong Growth in Revenue & EBITDA: Soho House has reportedly delivered double-digit revenue growth and over 50% annual growth in Adjusted EBITDA in recent years, which suggests operational momentum that investors believe can continue or accelerate. Connect CRE+1
Global Footprint and Diversified Offerings: With ~46 Houses, beach clubs, hotels, etc., Soho House is not dependent on one city or one kind of service. This diversification adds resilience and gives acquirers multiple levers to pull. Soho House+1
Member Experience & Cultural Relevance: Soho House’s identity is strongly tied to creative culture, design, hospitality. Maintaining that was a stated goal of the acquirer: “safeguard the member experience… protect and expand the cultural and creative foundation that has made Soho House…” Soho House+1

Risks and What Acquirers Must Beware Of

Of course, these networks aren’t without risk. Some pitfalls in valuation and execution that acquirers need to watch:

Dilution of exclusivity: Expanding too fast, admitting too many members, or growing in markets where costs are high but brand value lower, can erode perceived exclusivity and thus pricing power.
High fixed and capital costs: Real estate (rent or ownership), design, staffing, maintenance of ambiance are expensive. If revenues slip (e.g. due to economic downturns, travel lulls), margins can be fragile.
Operational complexity across geographies: Local labor laws, tastes, regulatory regimes, supply chains—all complicate scaling.
Brand risk: If member experience declines—poor service, over-crowding, inconsistent standards—it can lead to reputational damage which is hard to recover from.
Public market vs. private ownership dynamics: As Soho House’s case shows, being public may under-price the true value; going private provides leeway, but also demands discipline in capital structure, returns, and governance.

What Acquirers are Willing to Pay—and How Value is Measured

In deals like Soho House, acquirers often pay large premiums based primarily on:

Multiples of EBITDA or Adjusted EBITDA, often elevated when brand, growth, and membership metrics are strong.
The size, growth, and retention of membership base.
Non-financial metrics: brand metrics (awareness, prestige), digital engagement, member satisfaction, renewal rates, yield per member or per House.
Real estate value: though often the membership business is more scalable via less-capital-intensive paths (e.g. digital, events, licensing).

In Soho House, the $2.7B valuation (including debt) reflects not only the physical assets but expectations of continued growth, expansion, and preserving what makes the network special. Soho House+2Connect CRE+2

Lessons & Implications for Businesses and Investors

From this example, there are takeaways for both companies building membership networks and investors/acquirers evaluating them:

For founders/operators: invest deeply in community, experience, brand identity. Don’t sacrifice quality for scale hastily.
Track member metrics carefully—retention, lifetime value, satisfaction. These are major levers for valuation.
Maintain a culture of exclusivity or curation even while scaling; preserve what differentiates.
Operational rigor is key: tight control over costs, efficient capital deployment, strong localized execution.
For acquirers/investors: do thorough due diligence not just on financials, but on what underlies the brand and member value. What is the risk to culture? How scalable is the model?

Conclusion

Private members networks represent a fascinating class of assets in modern acquisition strategy. Unlike many traditional hospitality or hospitality-adjacent businesses, their value is deeply embedded in intangible assets: loyalty, culture, exclusivity, community. The Soho House deal underscores that acquirers are willing to bid substantial premiums when they believe these factors are strong and sustainable.

As more lifestyle, community, and experience-focused brands grow globally, this kind of acquisition logic is likely to become more common. For companies building or considering building a members-centric model, Soho House’s journey offers both inspiration and caution: scale up, but preserve what makes you special.