By Thomas J. Ryan
Hyperice’s merger with NormaTec is expected to help both companies accelerate their growth. But NormaTec’s CEO Gilad Jacobs tells SGB Executive that the bigger impact will be helping drive both companies’ shared goal of bringing recovery solutions to everyday people.
Jacobs said that when NormaTec, known for its pneumatic compression systems, was founded by his mother in 1998, sports recovery entailed either a massage, ice bath or rest. And for most people, those three options remain today.
Daily massages were for the “super-rich” or perhaps only the heavily-sponsored athlete such as Lance Armstrong when he was racking up wins at the Tour de France and that largely remains the same today. Ice baths have been seen as an effective way to recover for college and pro athletes. However, Jacobs said that increasingly, the science around the recovery benefits of ice baths “has not proven that out.”
That leaves “take a day off” as still the most common option for many aspiring athletes and Jacobs believes this runs counter to the performance mantra.
“This concept of being passive about something in your performance doesn’t lend itself to anything else,” said Jacobs. He pointed out that beyond their daily training routine, many athletes obsess about their nutrition, down to analyzing protein and carb intake and their fat ratios. Said Jacobs, “I’m not passive on my training. Why should we be passive about my recovery?”
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As first reported on Thursday, Hyperice, based in Irvine, CA and best known for its Hypervolt vibrating massage tool, will acquire NormaTec, based in Boston.
The companies will combine workforces, integrate product offerings, accelerate international business, and advance manufacturing competencies and product development initiatives. Jacobs will join Hyperice’s leadership team and Board of Directors as chief innovation officer. Jim Huether will lead the overall business as Hyperice’s CEO, and Anthony Katz stays on as Hyperice’s founder.
Jacobs said one expected benefit from the merger will be lower prices across both brands as a first step to making recovery more accessible. The lower prices are expected to be helped as efficiencies, particularly at the manufacturing level, are realized. Savings will also come from bundling in selling both brands to retailers instead of each being sold separately.
The combined companies will also be able to offer a full suite of products to better tell the story of recovery in the retail marketplace. Combining the two leaders in the space will further help get the recovery message out overall.
As chief innovation officer, Jacobs will focus on coming up with “some unbelievable product development” for both NormaTec and Hyperice. But he also plans to hit the road with Katz to elevate the recovery opportunity.
Said Jacobs, “Anthony, my friend and the founder of Hyperice, and I are going to be going around to key accounts and panels and basically talk about how we really created this industry, positioning ourselves as the Steve Jobs and Bill Gates of the recovery world. We’ve done a lot of that already kind of independently and next to each other, but now as a unified front it will only be more effective.”
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Jacobs said his close relationship with Katz was a primary reason the merger took place.
Jacobs met Katz about four years ago at a conference and both connected as they recognized each other as “product people.” Both brands also shared many of the same retailers from JackRabbit to Rogue Fitness, Best Buy and Amazon. Their products could be found in the same training rooms with each forming alliances with the NBA, NFL and NHL, as well as with Olympic organizations.
Over the years, Jacobs and Katz increasingly corresponded about employee, manufacturing or other issues and the two would share contacts and send each other sale opportunities for their respective categories.
Finally, the two last fall started talking about their similarities as well as the potential synergies and benefits of a united approach that would result from a combination.
The deal made more sense as the two companies were positioned at “the top of the heap” in the recovery space and take similar approaches to product and attention to detail. Jacobs added, “We really felt throughout this entire process, and understanding the ground game and landscape so to speak, that this is going to allow us to be greater than the sum of all our individual parts.”
Both also shared the ambition of making their products much more accessible. Jacobs said that while NormaTec first earned attention as the “secret weapon” that athletes like LeBron James used to “bio-hack his body,” the end goal remains to “create access to this technology from a recovery standpoint to the majority, the masses.” The ambition is to make Hyperice and NormaTec as common as Garmin or Fitbit to regular consumers as recovery tools.
“We started Hyperice not only to help improve athlete’s performance, but to provide the same level of technology to everyday people,” shared Katz in a statement. “In NormaTec, we found a company that shared our vision and mission and we are excited to welcome them into the Hyperice family.”
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Jacobs noted that both Hyperice and NormaTec are “on the upswing” with both coming off record years.
Jacobs said NormaTec is coming its “best year ever” from both a top and bottom-line perspective. The compression system helps players with muscle tissue recovery, assist in preventing blood clots in legs, tightness and soreness.
Growth has been helping by continually adding new features, designing the product to look more like a consumer electronic rather than a medical device, and finding ways to bring down prices. About ten months ago, NormaTec launched its next-generation system, the Pulse 2.0 series, that brought its price to $1,295 and feature a lithium-ion battery, Bluetooth capabilities and is a fifth of the size of its original system.
NormaTec’s solutions for legs continue to be particularly popular with its ties to runners although many are increasingly seeking out relief for their hips and lower back. NormaTec’s arm solutions are being sought out by pitchers, quarterbacks, swimmers and combat-sports participants. Lady Gaga was seen last fall using a full-body NormaTec suit as part of her recovery regimen.
Hyperice has seen the Hypervolt develop into a break-out item and that’s helped raise overall awareness for Hyperice’s product range that embraces percussion, vibration and thermal technologies. But many items across Hyperice’s line-up are likewise experiencing strong growth, Jacobs said, highlighting the Venom, a wearable, vibrating heat wrap; and the Viper range of vibrating foam rollers.
Many synergies from the merger are expected to come since the two companies overlap from a distribution and partnership standpoint as well as outreach message. Said Jacobs, “A lot of the synergies that exist are because we both openly have the same customer that we’re going after. It’s anybody who wants to feel better, move better and take their game to the next level.”
NormaTec is seen as more advanced in the endurance space after spending the last ten years attending IRONMAN as well as other marathon, triathlon and cycling events and NormaTec’s connections are expected to help Hyperice gain a bigger foothold there. Combing forces will also help the two companies attend 300-plus events over the next year, depending on the coronavirus outbreak, in a more offensive approach for both. Said Jacobs, “There’s a lot of ground to cover.”
For its part, Normatec is expected to have a bigger opportunity in health & wellness with the help of Hyperice, which has significant traction in the spa and overall fitness industry.
Hyperice will also help Noratec expand in the corporate space. Jacobs said NormaTec already works with Nike on such a program, but Hyperice has a more-developed Workplace Wellness program that offers on-site mobility classes and seminars, ergonomics training, and access to Hyperice devices to support corporate wellness programs.
As part of the merger, the combined company plans to launch “wellness pods” (a physical experience which includes a full suite of Hyperice and NormaTec devices), along with solutions-based protocols and education specifically designed to optimize human performance, longevity and health. The team anticipates the implementation of thousands of wellness pods throughout the world by the end of 2022. Jacobs said an overall goal is to extend corporate wellness initiatives beyond free health food and gym access to aspects such as team-building and collaboration.
The merged firms will also be engaged in scientific research to study the combined effects of the company’s full suite of products used in a variety of sequences for warm-up, recovery and general body maintenance.
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No organizational changes are expected as a result of the merger.
The NormaTec team will continue to be based in Boston. The overall company sees the benefit of having an Eastern headquarters that will support easier travel to Europe. Having an East-Coast presence will also add three more hours to customer service.
No major job rationalization is expected. Hyperice has been seeing accelerated growth with the break out success of the Hypervolt and has been in need of some “human capital” to shore up its overall infrastructure. Indeed, Jacobs said the company plans some key hires and promotions in coming weeks to support unified growth plans.
Jacobs said the retailers that he’s spoken in recent days have been “beyond stoked” on hearing of the merger plans, similarly anticipating the enhanced go-to-market approach from both brands. He said, “We’re going to be able to talk more with retailers, athletes and the space in general on best practices and protocols as we continue to research together. It’s also going to mean lower price points, which is going to mean better margins and better sales for retailers.”
Jacobs also said while many new competitors are aiming at the recovery space, they’re also raising awareness of the need for recovery tools. He believes the combination of Hyperice and Normatec will create a more “unified front” to further raise the barriers of entry. Savvy customers, he contends, doing their research will find Hyperice and Normatec as the best option as proven by the use and endorsement by the world’s top athletes.
But Jacobs also believes the recovery opportunity is only getting started as older generations are increasingly looking to stay active. He also sees parents increasingly seeing the benefits of improved performance and reduced rate of injury for their kids playing team sports. But the combined company will be better positioned to amplify that message. Said Jacobs, “We’re really excited about the huge splash that’s about to happen as we pool all our resources together.”
“This is a remarkable day for our consumers, partners and both organizations, as we now strengthen our position of leadership from both coasts as one collective team,” said Huether in a statement. “By joining forces, we will have the most talented, dynamic, and inspiring team on earth. We continue on our relentless mission to help people move better and live better, worldwide.”
Photo courtesy Hyperice + NormaTec
