The Beachbody Company, Forest Road
Acquisition Corp. and Myx Fitness Enter Three-Way Merger
The Transaction Values the Combined Company
at $2.9 Billion and is Expected to Add Over $420 Million of Cash to
the Balance Sheet, Including a Committed PIPE of $225 Million, Led
by Institutional Investors Including Fidelity Management &
Research Company LLC and Fertitta Capital
With This Transaction, Beachbody Will Be
Poised to Scale its Growing Platform of Over 2.6 Million Paid
Digital Subscribers into the Connected Fitness Space While Also
Accelerating International Expansion, Enhanced Innovation and
Opportunistic M&A
The Beachbody Company Group, LLC (“The Beachbody Company,”
“Beachbody” or “the Company”) announced today 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.
Upon closing of the business combination transaction, The
Beachbody Company will be the parent company of three premium
content and technology-driven businesses: Beachbody On Demand
(BOD), Openfit and Myx. The transaction is expected to close in the
second quarter of 2021 and 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 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.
Combined Company Overview
As a leader in digital fitness streaming and nutrition
solutions, Beachbody is well-positioned to capitalize on the
increased demand for at-home health and wellness offerings and will
further invest to drive accelerated customer acquisition, expand
internationally and pursue attractive, high-return M&A
opportunities.
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.
With the addition of Myx, the Company's portfolio will expand to
include a connected fitness offering that provides a holistic and
innovative on and off-bike solution with workouts that are
personalized based on machine learning and heart rate data. With an
attractive price point of $1,299, Myx sold over 27,000 bikes in its
first year of operation, and has a highly engaged customer base of
users who complete an average of 15 workouts each month. In
addition, the merger with Myx will further leverage the scale of
The Beachbody Company's platform as it unlocks synergies across
distribution, marketing and content creation for all three of its
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 Mr.
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.”
Mr. 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 (DTC) 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
& 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.”
Combined Company
Highlights
- A diverse portfolio that appeals to a broad consumer base
through a holistic approach that brings together at-home, digitally
enabled fitness, nutrition and community
- 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
- 2.6 million paid digital fitness subscribers with 96% month
over month retention
- Industry-leading 89% gross margins on digital subscription
revenue across all three brands
- The deepest library of premium fitness content in the industry
that generates more than 180 million views annually
- A premium portfolio of branded nutrition products that are
scientifically developed, clinically tested and strategically
paired with fitness content for a holistic health and wellness
experience
- Scalable platform that enables synergies across distribution,
marketing and content creation
- Management team with over 22 years of experience creating
content, acquiring customers and delivering substantial revenue and
EBITDA
- Well-positioned to unlock accelerated growth and expects to
achieve compound annual revenue growth of 30% over the next 5
years
Transaction Overview
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
(“PIPE”) 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.
The Board of Directors of Forest Road, and the Board of Managers
of each of Beachbody and Myx have unanimously approved the
transaction, and holders representing a majority of Beachbody
equity interests and a majority of Myx equity interests have signed
voting and support agreements agreeing to vote for the transaction.
In addition to Beachbody and Myx equity holder approvals, the
transaction will require the approval of the stockholders of Forest
Road, and is subject to other customary closing conditions,
including the receipt of certain regulatory approvals.
Additional information about the proposed transaction, including
a copy of the merger agreement and investor presentation, will be
provided in a Current Report on Form 8-K to be filed with the
Securities and Exchange Commission and will be available at
www.sec.gov.
Advisors
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.
Investor Conference Call Information
Forest Road and Beachbody will host an investor conference call
to discuss the proposed transaction on February 10, 2021 at 9:00 am
Eastern time.
Interested parties may listen to the prepared remarks call via
telephone by dialing 1-877-407-3982 or, for international callers,
1-201-493-6780. For those who are unable to listen to the live
call, a replay will be available until 11:59 pm ET on February 24,
2021 and can be accessed by dialing 1-844-512-2921, or for
international callers, 1-412-317-6671 and entering replay Pin
number: 13716416. A webcast of the call will also be available on
the Forest Road website at https://www.spacroadone.com.
The pre-recorded conference call webcast, a related investor
presentation with more detailed information regarding the proposed
transaction and a transcript of the investor call will also be
available at https://www.spacroadone.com/. The investor
presentation which will be furnished today to the SEC, can be
viewed at the SEC’s website at www.sec.gov.
About The Beachbody Company
Headquartered in Santa Monica, The Beachbody Company is a
worldwide leader in health and fitness, with a 22-year track record
of creating innovative content and powerful brands. With 2.6
million paid digital fitness subscribers across two platforms, a
nationwide peer-support system of over 400,000 influencers and
coaches, and a premium portfolio of branded nutrition products,
Beachbody is a leading holistic health and wellness company with
over $1 billion in revenue projected in 2021. The Beachbody Company
is the parent company to the Beachbody On Demand platform, the
fast-growing DTC platform Openfit, which launched in 2019 and
features 400+ live trainer-led group fitness classes per week with
real-time feedback, and following the merger, Myx Fitness, a
connected fitness company which offers science-driven, highly
personalized heart rate-based training. For more information,
please visit TheBeachbodyCompany.com.
With the highest-rated premium content, and a rating of 4.9 out
of 5 stars in the App Store, the Beachbody digital model integrates
programs such as P90X®, INSANITY®, 21 Day Fix®, Body Beast®, PiYo®,
80 Day Obsession®, Transform:20® and LIIFT4® on the Beachbody On
Demand streaming service with proprietary meal planning strategies
and clinically-proven nutrition supplements that are developed by
top scientists and fitness and nutrition experts – including the
Shakeology line of premium, superfood supplements— and a network of
social influencer coaches that delivers motivation and
accountability to help customers achieve and maintain healthy
results. Featuring a broad range of the nation's most popular
fitness and weight-loss solutions, the Company offers more than
2,300 titles of streamed fitness content (in English and Spanish)
with 84 programs for beginners, extreme, dance, yoga,
pre/postnatal, kids, etc.
Openfit is a digital streaming platform that integrates fitness,
nutrition and wellness together in one place. Openfit provides
world-class fitness programs with live trainer-led and on-demand
workouts such as Xtend Barre and 4 Weeks of Focus with Shay
Mitchell, designed to help subscribers reach any goal with
personalized nutrition plans and tracking. Openfit acquired Ladder
in 2020, the sports nutrition company founded by LeBron James and
Arnold Schwarzenegger. Ladder product is NSF Certified for Sport®,
a third-party certification trusted by all major sports governing
bodies and verifies that products do not contain any of
approximately 270+ substances banned by major athletic
organizations and that the contents of the product match what is
printed on the label.
About Myx Fitness
Myx Fitness delivers a revolutionary and personalized solution
for its members to make connected fitness part of their daily
lives. The brand's cornerstone products, The MYX and The MYX Plus,
offer professional-quality equipment at an affordable price,
hundreds of on-demand classes, combined with expert coaching on a
digital platform, designed to improve endurance, strength, mobility
and flexibility. Using science-backed methods, Myx Fitness utilizes
proprietary heart rate technology and cross-training, brought to
life through positive coaching, to deliver lasting results. Myx
Fitness was founded in 2016 by Brad Palmer and the team at Palm
Ventures, his private investment firm focused on incubating market
disrupting businesses.
The MYX and The MYX Plus include a professional-grade Star Trac
Stationary Bike, a 21.5" interactive tablet and a Polar OH1 Heart
Rate Monitor. The Plus package also includes three sets of SPRI
dumbbells, a kettlebell, a resistance band, a 24" foam roller and
two mats. Myx Fitness uses science-backed, heart rate-based 1:1
training technology to customize every workout to maximize results,
ensure lasting results and avoid wasted time and energy. Myx
Fitness is available starting at $1,299 with delivery nationwide in
approximately three to five weeks depending on location and
scheduling availability.
About Forest Road Acquisition Corp.
Forest Road Acquisition Corp., a blank check company formed for
the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business
combination with one or more businesses, raised $300 million in
November 2020 and its securities are listed on the NYSE under the
tickers “FRX,” “FRX.U” and “FRX WS.” The Forest Road team includes
three former Disney senior executives — Tom Staggs, director and
Chairperson of the Strategic Advisory Committee, Kevin Mayer,
strategic advisor and Salil Mehta, Chief Financial Officer — and is
strengthened by the strategic connectivity and deal-making
expertise of directors, officers and strategic advisors like
Shaquille O'Neal, Peter Schlessel, Keith Horn, Sheila Stamps,
Teresa Miles Walsh and Martin Luther King III. For more
information, please visit https://www.spacroadone.com/.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws with respect to
the proposed transaction between Beachbody and Forest Road,
including statements regarding the anticipated benefits of the
transaction, the anticipated timing of the transaction, future
financial condition and performance of Beachbody and expected
financial impacts of the transaction (including future revenue, pro
forma equity value and cash balance), the satisfaction of closing
conditions to the transaction, the PIPE transaction, the level of
redemptions of FRX’s public stockholders and the products and
markets and expected future performance and market opportunities of
Beachbody. These forward-looking statements generally are
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result" and similar expressions.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. Many factors could cause actual future events to
differ materially from the forward-looking statements in this press
release, including but not limited to: (i) the risk that the
transaction may not be completed in a timely manner or at all,
which may adversely affect the price of FRX’s securities, (ii) the
risk that the transaction may not be completed by FRX’s business
combination deadline and the potential failure to obtain an
extension of the business combination deadline if sought by FRX,
(iii) the failure to satisfy the conditions to the consummation of
the transaction, including the approval of the merger agreement by
the stockholders of FRX, the satisfaction of the minimum trust
account amount following any redemptions by FRX’s public
stockholders and the receipt of certain governmental and regulatory
approvals, (iv) the lack of a third party valuation in determining
whether or not to pursue the proposed transaction, (v) the
inability to complete the PIPE transaction, (vi) the occurrence of
any event, change or other circumstance that could give rise to the
termination of the merger agreement, (vii) the effect of the
announcement or pendency of the transaction on Beachbody’s business
relationships, operating results, and business generally, (viii)
risks that the proposed transaction disrupts current plans and
operations of Beachbody, (ix) the outcome of any legal proceedings
that may be instituted against Beachbody or against FRX related to
the merger agreement or the proposed transaction, (x) the ability
to maintain the listing of FRX’s securities on a national
securities exchange, (xi) changes in the competitive and regulated
industries in which Beachbody and Myx operate, variations in
operating performance across competitors, changes in laws and
regulations affecting the business of Beachbody and Myx and changes
in the combined capital structure, (xii) the ability to implement
business plans, forecasts, and other expectations after the
completion of the proposed transaction, and identify and realize
additional opportunities, (xiii) the risk of downturns and a
changing regulatory landscape in the highly competitive residential
real estate industry, and (ix) costs related to the transaction and
the failure to realize anticipated benefits of the transaction or
to realize estimated pro forma results and underlying assumptions,
including with respect to estimated shareholder redemptions. The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties described in the "Risk Factors" section of the
registration statement on Form S-4 discussed below and other
documents filed by FRX from time to time with the SEC. These
filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Beachbody and FRX assume no obligation and do not
intend to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
None of Beachbody, Myx or FRX gives any assurance that Beachbody,
Myx or FRX, or the combined company, will achieve its
expectations.
Important Information and Where to Find It
This press release relates to a proposed transaction among The
Beachbody Company, Forest Road Acquisition Corp., and Myx Fitness.
This press release does not constitute an offer to sell or
exchange, or the solicitation of an offer to buy or exchange, any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. FRX intends to file a
registration statement on Form S-4 with the SEC, which will include
a document that serves as a prospectus and proxy statement of FRX,
referred to as a proxy statement/prospectus. A proxy
statement/prospectus will be sent to all FRX shareholders. FRX also
will file other documents regarding the proposed transaction with
the SEC. Before making any voting decision, investors and security
holders of FRX are urged to read the registration statement, the
proxy statement/prospectus and all other relevant documents filed
or that will be filed with the SEC in connection with the proposed
transaction as they become available because they will contain
important information about the proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by FRX through the website maintained by
the SEC at www.sec.gov.
Participants in the Solicitation
FRX and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from FRX’s shareholders
in connection with the proposed transaction. A list of the names of
such directors and executive officers and information regarding
their interests in the business combination will be contained in
the proxy statement/prospectus when available. You may obtain free
copies of these documents as described in the preceding
paragraph.
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Investors For the Beachbody Company: ICR -
Beachbody@icrinc.com For Forest Road: ir@forestroadco.com
Media For The Beachbody Company: ICR -
BeachbodyPR@icrinc.com For Forest Road: media@forestroadco.com
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