Mindbody acquires ClassPass, merger gets $500 million investment (Axios, October 14, 2021)

Summary

Axios news article of October 14, 2021 reporting that Mindbody, a booking engine for boutique fitness providers, agreed to buy ClassPass, a monthly subscription service for fitness classes. It reports that Sixth Street is leading a $500 million investment in the combined company and that no pricing terms of the all-stock deal were disclosed. According to the article, Mindbody will hold between 60%-70% of the combined business. It adds that Vista Equity Partners took Mindbody private in 2019 for $1.9 billion and that ClassPass raised nearly $600 million in venture funding.

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Oct 14, 2021 - Economy

Mindbody acquires ClassPass, merger gets $500 million investment

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Illustration: Eniola Odetunde/Axios

Mindbody, a B2B discovery and booking engine for boutique fitness providers, agreed to buy ClassPass, a monthly subscription service for fitness classes.

Why it matters: Because this is one of those mergers that just made too much sense not to happen. Mindbody helps users discover local fitness options, but didn't offer the sorts of multi-vendor bundles that are ClassPass' bread and butter (or kale and virgin olive oil, in this context).

Investor info: Mindbody was taken private by Vista Equity Partners in 2019 for $1.9 billion. ClassPass raised nearly $600 million in VC funding, most recently at a $1 billion valuation in early 2020, from firms like Apax Digital, L Catterton and General Catalyst. New investor Sixth Street is leading a $500 million investment in the combined company.

Deal structure: No pricing terms of the all-stock deal were disclosed, but Axios has learned that Mindbody will hold between a 60%-70% in the combined business, with ClassPass valued "significantly" above that $1 billion mark.

The bottom line: "The acquisition comes ... as studios reopen with nearly 80% of consumers feeling that wellness is more important than ever. Additionally, several markets that have fully reopened are seeing bookings on the Mindbody platform rebounding to pre-COVID levels and ClassPass consumer usage is at 110% percent of pre-COVID usage for subscribers who have gone back to class," Forbes writes.

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