A SPAC from Shaquille O'Neal and three former Disney executives announced plans to merge Beachbody Company and Myx Fitness to capitalize on the growing demand for at-home and connected fitness.
The SPAC Deal: Beachbody Company and Myx Fitness are going public in a merger with Forest Road Acquisition Corp FRX, a SPAC that includes three former Walt Disney Co DIS executives.
The three-way merger values the combined company at $2.9 billion. Beachbody will see $420 million in gross proceeds.
The new company will trade as The Beachbody Company with ticker "BODY" on the NYSE.
Forest Road team member Kevin Mayer will join the Board of Directors of the new company. Mayer worked at both ESPN and TikTok before joining the SPAC.
Current Forest Road shareholders will own 8.8% of the new company.
Disclosure: The author owns shares of FRXU.
About Beachbody: Beachbody has 2.6 million paid digital subscribers in the connected fitness space. Popular brands under Beachbody are P90X, Insanity and 21 Day Fix.
The company has expanded its market share over the last two decades and built a loyal community, according to the presentation. Beachbody has the deepest library of premium fitness content in the industry with 180 million views annually.
Openfit is the digital streaming service owned by Beachbody. Openfit acquired sports nutrition brand Ladder in 2020. Ladder was founded by LeBron James and Arnold Schwarzenegger.
About Myx: Myx Fitness Holdings is an at-home connected platform that offers a connected bike. The company offers personalized workouts from proprietary machine learnings and heart rate data.
The Myx bike retails for $1,299. Over 27,000 units were sold in the first year of operation. An average of 15 workouts per month were completed by Myx customers on the bike.
The Myx bike comes with a stationary bike, an interactive tablet and heart rate monitor. The Myx Plus version comes with sets of dumbbells, a kettleball, resistance band and two mats.
Myx saw sales of $30 million in its first year. The estimate is $100 million in revenue for fiscal 2021 from the new company.
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Growth Plans: Beachbody said it can grow with turning digital subscribers into connected fitness customers, international expansion, innovation and M&A opportunities.
The company said it's at the center of three mega trends with digital subscriptions, connected fitness and the growth of consumer health and wellness. Macro tailwinds show at-home fitness being favored during and after the COVID-19 pandemic, according to the company.
The health and wellness industry is worth $1.5 trillion annually. An estimated $10 billion in annual spending is expected to leave the gym sector and could go to at-home fitness.
Online fitness was a $6 billion market in 2019 and is expected to grow to $59 billion in 2027.
Myx is at the center of the company’s growth plans with the connected fitness model transferring to other business components through cross-selling.
Financials: Combined revenue of the companies was $880 million in fiscal 2020. The company sees revenue growing 30% annually over the next five years.
The combined company is estimating revenue to hit $1.1 billion in fiscal 2021, $1.5 billion in fiscal 2022 and $3.3 billion in fiscal 2025. The company sees digital subscribers growing from 3.7 million in fiscal 2021 to 10.9 million by 2025.
Price Action: Shares of Forest Road Acquisition are up 5% to $11.27 Wednesday. Shares spiked over $16 in pre-market trading on the deal announcement.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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