Forest Laboratories, Inc. (NYSE: FRX), Walt Disney Firm (NYSE: DIS) – Shaq SPAC Lands Deal for Beachbody, MyX Health to seize the expansion of the related dwelling health market
A SPAC from Shaquille O’Neal and three former Disney executives announced plans to merge Beachbody Company and Myx Fitness to meet growing demand for home and connected fitness.
The SPAC deal: Beachbody Company and Myx Fitness go public as part of a merger Forest Road Acquisition Corp. (NYSE: FRX), a SPAC that includes three former Walt Disney Co. (NYSE: DIS) executives.
The three-way merger values the combined company at $ 2.9 billion. Beachbody will generate gross proceeds of $ 420 million.
The new company will trade as The Beachbody Company with the ticker “BODY” on the NYSE.
Forest Road team member Kevin Mayer will join the new company’s board of directors. Mayer worked at both ESPN and TikTok before moving to SPAC.
Current Forest Road shareholders will own 8.8% of the new company.
Disclosure: The author owns shares in FRXU.
About Beachbody: Beachbody has 2.6 million paid digital subscribers in the attached fitness space. Popular brands among Beachbody are P90X, Insanity and 21 Day Fix.
The company has grown its market share over the past two decades and, according to the presentation, has built a loyal community. Beachbody has the industry’s deepest library of premium fitness content with 180 million views per year.
Openfit is Beachbody’s digital streaming service. Openfit acquired the sports nutrition brand Ladder in 2020. Ladder was founded by LeBron James and Arnold Schwarzenegger.
About Myx: Myx Fitness Holdings is a home connected platform that offers a connected bike. The company offers personalized workouts based on proprietary machine learning processes and heart rate data.
The Myx bike costs $ 1,299. Over 27,000 units were sold in the first year of operation. Myx customers completed an average of 15 training units per month on bicycles.
The Myx bike comes with a stationary bike, an interactive tablet and a heart rate monitor. The Myx Plus version includes sets of dumbbells, a kettle ball, a resistance band and two mats.
Myx had first year sales of $ 30 million. The new company’s fiscal 2021 estimate is $ 100 million.
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Growth plans: Beachbody said it can grow as digital subscribers become connected fitness customers, international expansion, innovation and M&A opportunities.
The company said it was at the center of three megatrends with digital subscriptions, connected fitness, and the growth in consumer health and wellbeing. Macro tailwinds show fitness at home is preferred during and after the COVID-19 pandemic, the company said.
The health and wellness industry is valued at $ 1.5 trillion annually. It is expected that an estimated $ 10 billion in annual spending could leave the gym and be used for home fitness.
Online fitness was a $ 6 billion market in 2019 and is projected to grow to $ 59 billion in 2027.
Myx is at the center of the company’s growth plans as the connected fitness model is cross-sold to other business components.
Finances: The combined revenue of the companies for fiscal 2020 was $ 880 million. The company will see annual sales growth of 30% for the next five years.
The combined company estimates sales will reach $ 1.1 billion in fiscal 2021, $ 1.5 billion in fiscal 2022, and $ 3.3 billion in fiscal 2025. The company is seeing growth in digital subscribers from 3.7 million in fiscal 2021 to 10.9 million by 2025.
Price action: Forest Road Acquisition’s stake rose 5% on Wednesday to $ 11.27. Upon the announcement of the deal, shares rose over $ 16 in pre-market trading.
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