Beachbody Company Group LLC said that it plans to become a public company by entering into a definitive three-way merger agreement with Forest Road Acquisition Corp. (FRX), a publicly-traded special purpose acquisition company, and Myx Fitness Holdings LLC.
Upon closing of the business combination transaction, The Beachbody Company will be the parent of three content and technology-driven businesses: Beachbody On Demand, Openfit, and Myx.
The transaction is expected to close in Q221. The combined company will be listed on the NYSE under a new ticker symbol, “BODY”.
Beachbody will continue to be led by Carl Daikeler, Beachbody’s co-founder, chairman and CEO and Jon Congdon, co-founder of Beachbody and CEO of Openfit. Forest Road’s strategic advisor Kevin Mayer, former CEO of TikTok and leader behind Disney+, will join the combined company’s Board of Directors. Beachbody management and shareholders are rolling over 100 percent of their equity stake and will own approximately 84 percent of the pro forma business at close.
The combined company generated 2020 pro forma revenue of $880 million across BOD, Openfit and Myx, which achieved $30 million of revenue in its first year of operations. The combined business also has 2.6 million paid digital fitness subscribers with 96 percent month-over-month retention and 89 percent gross margins on digital subscription revenue across all three brands.
“We are excited to partner with Forest Road and Myx Fitness, and are humbled by the proven team of executives and industry icons who have stepped forward to support our shared vision,” said Daikeler. “We have seen incredible digital growth in recent years, which was further fueled in 2020 by a structural and lasting shift in how people embrace health and fitness. With the acquisition of Myx, cutting edge technology meets best-in-class streaming content, and we will continue to redefine the at-home fitness experience as we pair the integrated hardware, science-based heart rate coaching and personalized smart recommendations behind Myx with Beachbody and Openfit’s best-in-class content libraries, track record of content innovation and vast network.”
Mayer commented: “Beachbody’s rapid subscriber growth is grounded in the concept of community and accountability with a mission-driven focus that capitalizes on the huge growth in the health and wellness space. The Company’s engagement and retention metrics validate the quality and depth of its content library and direct-to-consumer technology capabilities. I see many parallels at Beachbody with the work we did at Disney, where we aggressively accelerated our digital transformation and leveraged our content to build Disney+, ESPN+ and Hulu. In addition to its significant organic growth potential, the scale and differentiation of Beachbody’s platform will allow us to pursue attractive M&A opportunities in this highly fragmented ecosystem, which will enable us to increase our market share globally and diversify our product offering. I’m excited to join the board to help further fuel growth and value creation for the company and its shareholders.”
“When we raised our SPAC, we were determined to find a company with a strong, proven business model and significant growth potential where we could add value from our experience in the creation and monetization of premium content. Beachbody is a perfect fit with those objectives,” said Tom Staggs, former COO and CFO of Disney and Forest Road board member and strategic advisory committee chair. “We are fortunate to have identified a business poised to benefit from three powerful market trends—digital subscriptions, connected fitness and growing consumer demand for health and wellness. These trends give us even more confidence that we have found an extremely attractive investment for our shareholders. Beachbody has always leveraged its fitness content to acquire customers profitably and with the proceeds of this transaction, Carl and his team at Beachbody can invest to significantly accelerate customer acquisition and financial growth for years to come.”
