Beachbody Makes Plans to Combine with MYX Fitness and Go Public
A Three-Way Merger
Fitness and nutrition company Beachbody is making plans for a three-way merger. Beachbody will join forces with MYX Fitness, which makes stationary bikes, and blank-check company Forest Road Acquisition Corp. (FRX).
The combined company, which will operate using the Beachbody name, is valued at almost $3 billion. Once the deal closes, the new company will trade on the New York Stock Exchange.
SPACs vs. IPOs
A special purpose acquisition company, also known as a SPAC or a blank-check company, is created to raise capital through an IPO in order to buy an existing company. SPACs usually need to find an acquisition target within a certain period of time, often two years. A private company will then go public by merging with a SPAC rather than going through their own traditional IPO.
Last November Forest Road Acquisition Corp. raised $300 million in an IPO, and since then it has been looking for companies seeking mergers. After receiving interest from at least 50 businesses, it has settled on merging with Beachboy and MYX Fitness. Forest Road’s team includes former TikTok CEO Kevin Mayer as well as Tom Staggs, a former CFO and COO of Disney (DIS).
Riding the Home Fitness Wave
Forest Road decided to merge with Beachboy and MYX because these companies have successfully capitalized on the at-home fitness boom which has taken place during the pandemic. Beachbody, which provides fitness streaming content as well as meal plans, has gained popularity during the pandemic and now has over 2.6 million paid digital subscribers. MYX has sold more than 27,000 bikes since they rolled out the product a year ago.
Analysts estimate that the new company will generate over $1.1 billion in revenue next year. Even when more of the population is vaccinated and some return to gyms, it is predicted that many people will stick to at-home fitness habits formed during the pandemic. This could help the new company and other at-home fitness businesses continue to see growth.
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