Fitness and nutrition company Beachbody recently announced a three-way merger with equipment manufacturer MYX Fitness and a blank check SPAC (special purpose acquisition company) Forest Road Acquisition Corp. As a result, the three companies will join forces to go public at a combined value of $2.9 billion.
The merger originally was announced by Beachbody, which is understandably short for Beachbody Co. Group LLC. As a result of the merger, Beachbody will become the parent company to MYX Fitness. The fitness competitor’s MYX exercise bike currently sits as one of the most affordable alternatives to Peloton.
The deal is expected to close in the second quarter of this year and will go public on the New York Stock Exchange (NYSE) as $BODY. According to a report by the WSJ, Beachbody currently has more than 2.6 million paid digital subscribers. With the merger, it will now own and operate two online fitness businesses in addition to MYX – Beachbody on Demand, and Openfit.
Beachbody continues to grow
This merger appears to be a strategic chess move aimed at Peloton’s market. The fitness manufacturer reported $1.8 billion in revenue for 2020 and has increased by 100% year over year. Peloton appears to be making its own capital moves as well. It just announced its plains to raise close to $1 billion in senior notes. The money will seemingly go toward its supply chain, which is its biggest headache at the moment.
The Beachbody merger comes with a lot of financial prowess and celebrity backing too. Openfit previously acquired the nutritional brand Ladder, which was founded by LeBron James and Arnold Schwarzenegger. Both remain investors. Forest Road Acquisition Corp. was founded by three former Disney executives as well as basketball star turned ubiquitous entrepreneur, Shaquille O’Neal.
This merger may not be a direct attack on Peloton’s market dominance. However, one can bet that Beachbody’s expansion into fitness equipment and a public offering is a big step in grabbing its own big piece of the profits.