The Beachbody Company, Santa Monica, California, has entered into a three-way merger agreement that will make it a public company, The Beachbody Company announced on Feb. 10.
The two merger partners are Forest Road Acquisition Corp., a publicly traded special purpose acquisition company, and Myx Fitness Holdings LLC, an at-home connected fitness platform featuring a bike and home studio.
The combined company is valued at $2.9 billion and is expected to add more than $420 million of cash to the balance sheet, including a committed private investment in public equity of $225 million led by institutional investors that include Fidelity Management & Research Company LLC and Fertitta Capital.
The Beachbody Company will be the parent company of three content and technology-driven businesses: Beachbody On Demand (BOD), Openfit and Myx.
The transaction is expected to close in second quarter 2021. The combined company will be listed on the New York Stock Exchange under a new ticker symbol, BODY.
Beachbody will continue to be led by Carl Daikeler, Beachbody’s co-founder, chairman and CEO, and Jon Congdon, co-founder of Beachbody and CEO of Openfit. Forest Road’s strategic advisor Kevin Mayer, former CEO of TikTok and the leader behind Disney+, will join the combined company’s board of directors. Beachbody management and shareholders are rolling over 100 percent of their equity stake and will own approximately 84 percent of the pro forma business at close.
Beachbody is looking to capitalize on the increased demand for at-home health and wellness offerings and will further invest to drive accelerated customer acquisition, expand internationally and pursue attractive, high-return merger and acquisition opportunities, according to Beachbody.
Beachbody has brands P90X, INSANITY and 21 Day Fix. Through the BOD and Openfit platforms, the company has developed a diverse offering of live and on-demand content as well as nutrition solutions that reach more than 2.6 million paid digital subscribers.
With the addition of Myx, the company's portfolio will expand to include a connected fitness offering that provides an on- and off-bike offering with workouts that are personalized based on machine learning and heart rate data. Myx sold over 27,000 bikes, which are priced at $1,299, in its first year of operation. Its customer base of users completed an average of 15 workouts each month.
The merger with Myx will help leverage the scale of The Beachbody Company's platform synergies in distribution, marketing and content creation for all three of its brands, according to the company.
“We have seen incredible digital growth in recent years, which was further fueled in 2020 by a structural and lasting shift in how people embrace health and fitness,” Daikeler said.
With the merger, the company will redefine the at-home fitness experience, pairing the integrated hardware, science-based heart-rate coaching and personalized smart recommendations behind Myx with Beachbody and Openfit’s content libraries, content innovation and vast network, he added
“The company's engagement and retention metrics validate the quality and depth of its content library and direct-to-consumer (DTC) technology capabilities,” Mayer said.
He sees parallels at Beachbody with the work he did at Disney, where the company accelerated its digital transformation and leveraged its content to build Disney+, ESPN+ and Hulu.
“In addition to its significant organic growth potential, the scale and differentiation of Beachbody’s platform will allow us to pursue attractive M&A opportunities in this highly fragmented ecosystem, which will enable us to increase our market share globally and diversify our product offering,” Mayer said.
Tom Staggs, former COO & CFO of Disney and Forest Road board member and strategic advisory committee chair, said: “We are fortunate to have identified a business poised to benefit from three powerful market trends: digital subscriptions, connected fitness and growing consumer demand for health and wellness. These trends give us even more confidence that we have found an extremely attractive investment for our shareholders.”