Solo Brands, Inc., the owner of the Solo Stove, Chubbies, Isle, and Oru brands, is conducting a series of transactions that are designed to simplify its organizational structure, including the elimination of its umbrella partnership C corporation (Up-C) structure, which has the effect of limiting material liability for potential cash payments under its Tax Receivable Agreement (TRA).
“We are simplifying our corporate structure to strengthen governance and align with shareholder interests. Capping the tax receivable agreement lowers future obligations, and the simplified structure creates opportunities for efficient tax planning to support long-term value creation,” said John Larson, president and CEO, Solo Brands, Inc.
As part of the transactions, the outstanding shares of Solo Brands Class B common stock held by former TRA parties will be cancelled, and corresponding units of Solo Stove Holdings, LLC, a subsidiary of the company, will be exchanged for shares of Solo Brands Class A common stock on a one-for-one basis. As a result, Solo Brands will have a single class of common stock outstanding with approximately 2.5 million shares of Class A common stock as of January 1, 2026.
The full text of the merger agreement affecting the foregoing simplification is found here.
The company offered the following summary of the transactions:
- The transactions are intended to limit material liability for cash payments that might otherwise be due in 2026 and beyond, under the terms of the TRA, as well as future distributions to redeemable non-controlling interests.
- The transactions optimize the company’s legal entity structure, reducing our future cash tax payments by an estimated $10 million over the next five years.
- Solo Brands expects to realize ~$0.5 million in annual savings from reduced compliance and financial reporting costs associated with having a single class of common stock outstanding.
Image courtesy Solo Stove/Solo Brands, Inc.
