P90X and Insanity Workout Company Intends to go Public with SPAC
Posted on 03/05/2021
In February 2021, The Beachbody Company Group, LLC disclosed its intention to become a public company by entering into a definitive three-way merger agreement with Forest Road Acquisition Corp. (NYSE: FRX) (“Forest Road”), a publicly traded special purpose acquisition company, and Myx Fitness Holdings, LLC (“Myx Fitness” or “Myx”), an at-home connected fitness platform featuring an industry leading bike and home studio. Beachbody will continue to be led by Carl Daikeler, Beachbody’s co-founder, Chairman and Chief Executive Officer and Jon Congdon, co-founder of Beachbody and CEO of Openfit. Forest Road’s strategic advisor Kevin Mayer, former CEO of TikTok and visionary leader behind Disney+, will join the combined company’s Board of Directors. Beachbody management and shareholders are rolling over 100% of their equity stake and will own approximately 84% of the pro forma business at close.
According to the press release at the time, “With brands such as P90X®, INSANITY® and 21 Day Fix®, Beachbody has consistently expanded its market share over the past two decades through its proven model of integrating the most comprehensive library of premium fitness content with easy-to-follow nutrition guidance and supplements. Through the BOD and Openfit platforms, the Company has developed a diverse offering of live and on-demand content as well as nutrition solutions that reach a passionate and loyal community, including more than 2.6 million paid digital subscribers.”
In addition to the approximately $300 million held in Forest Road’s trust account (assuming no redemptions), institutional investors, including Fidelity Management & Research Company LLC and Fertitta Capital, have committed to a private placement of $225 million to purchase shares of Class A common stock of the combined company that will close concurrently with the business combination.
The transaction implies a pro forma enterprise value for Beachbody of approximately $2.9 billion, or 2.0x 2022 estimated revenue. It is anticipated that the combined company will have over $420 million of unrestricted cash on the balance sheet, assuming no redemptions from the trust account, to fund its future growth plans.
In 2019, The Beachbody Company generated US$ 756 million in revenue, US$ 503 million was from nutritional products, and US$ 253 million was from digital subscriptions. Nutritional products include Shakeology, Beachbar, and Beachbody Performance.
In 2018, The Beachbody Company generated US$ 790 million in revenue, US$ 581 million was from nutritional products, and US$ 209 million was from digital subscriptions.
The Raine Group LLC (“Raine”) acted as exclusive financial advisor to Beachbody. Credit Suisse (USA) LLC (“Credit Suisse”) is acting as lead capital markets advisor to Beachbody. BofA Securities, Inc. is acting as an additional capital markets advisor to Beachbody. Latham & Watkins LLP and Cozen O’Connor C.P. are acting as legal advisors to Beachbody.
Credit Suisse is acting as lead placement agent and Raine and Cantor Fitzgerald & Co are acting as placement agents on the private placement. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Credit Suisse on the private placement.
Guggenheim Securities, LLC is acting as lead financial and capital markets advisor to Forest Road. Greenhill & Co, LLC is also acting as financial advisor to Forest Road. Robert W. Baird & Co. Incorporated is acting as an additional capital markets advisor to Forest Road. Kirkland & Ellis LLP and Ellenoff Grossman & Schole LLP are acting as legal advisors to Forest Road.
Greenberg Traurig, LLP is acting as legal advisor to Myx Fitness.