Beachbody, the big California-based digital fitness streaming and nutrition company, will go public on the New York Stock Exchange following an agreement to merge with Myx Fitness Holdings, which sells connected fitness bikes, and SPAC Forest Road Acquisition Corp., which is already on the stock exchange.
Beachbody’s current management and shareholders will roll over their entire equity stake, ending up with an interest of around 84 percent in the resulting entity, which will retain the name The Beachbody Company. The deal is expected to close in the second quarter.
On a pro-forma basis, the company had revenues of $880 million in 2020, of which $30 million came from Myx Fitness. The bulk came from Beachbody’s digital fitness subscriptions, which grew to 2.6 million, generating a gross margin of 89 percent.
The group is being valued at about $2.9 billion, on two times projected revenues by 2022. The combined company is forecasting annual compound growth of 30 percent over the next five years. An investment of $300 million will come from a trust controlled by Forest Road, which will be represented on the company’s board by a strategic advisor, Kevin Mayer, an expert in streaming and international development who ran TikTok for only 100 days last year, after working for Walt Disney for 15 years.
With over $420 million of unrestricted cash on its balance sheet, the new and bigger Beachbody may want to challenge the supremacy of Peloton in connected fitness with its combination of online sessions and connected exercise bikes, which Myx sells for $1,299 apiece. In contrast with Peloton and others, Beachbody offers an wider assortment of workout and nutrition subscriptions at various price points.
Like Peloton, Beachbody has potential for international expansion. The Beachbody brand has a license for shoes, apparel and accessories with Global Brand Partners, a company in Singapore that is run by Killick Datta, a veteran of the sporting goods industry who has a lot of international experience. Its business continued to grow in 2020, and Datta expects it to triple this year alone, thanks to new distribution agreements and a big push in China.