Forest Road Acquisition Corp., a Special Purpose Acquisition Vehicle (or SPAC) backed by the eponymous entertainment finance company with an advisor roster in Hollywood, has found its target, announcing plans to purchase the fitness specialist. Beachbody Company digital and publish it.
The transaction involves a three-way merger between Forest Road SPAC, Myx Fitness Holdings, a connected home fitness platform, and Beachbody, based in Santa Monica. The transaction values the combined business at $ 2.9 billion and is expected to add more than $ 420 million in cash to the balance sheet.
This is one of the first high profile acquisitions supported by PSPC in the field of entertainment by a new generation of financial vehicles also referred to as “blank check” companies. The backers, in this case Forest Road, assemble seasoned executives, create a PSPC, publish it, and begin looking for an operating company to acquire. Merging with a SPAC is a faster and easier way for a private company to go public.
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“When we increased our PSPC, we were determined to find a company with a strong and proven business model and significant growth potential where we could add value from our experience in creating and monetizing premium content. Beachbody fits those goals perfectly, ”said Tom Staggs, former COO and CFO of Disney and Forest Road, member of the board of directors and chair of the strategic advisory committee.
Beachbody will continue to be led by Carl Daikeler, Beachbody Co-Founder, Chairman and CEO Jon Congdon, Beachbody Co-Founder and Openfit CEO. Forest Road strategic advisor Kevin Mayer, former CEO of TikTok and senior executive at Disney, will join the merged company’s board of directors. Beachbody management and shareholders are deferring 100% of their ownership interest and will own approximately 84% of the pro forma business at closing.
Upon closing, The Beachbody Company will become the parent company of three companies focused on technology and premium content: 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’s rapid growth in subscriber numbers is grounded in the concept of community and responsibility with a mission-driven focus that capitalizes on the tremendous growth of 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 a lot of parallels at Beachbody to the work we’ve done at Disney, where we’ve aggressively accelerated our digital transformation and leveraged our content to create Disney +, ESPN +, and Hulu, ”said Mayer.
“I am delighted to join the Board of Directors to help further fuel growth and value creation for the company and its shareholders.
Forest Road announced the SPAC in October and went public in November. SPACS have up to two years to identify buyout targets.
The Forest Road team includes three former senior Disney executives – Staggs, Mayer and Salil Mehta, its CFO. Other directors, officers and strategic advisors include Shaquille O’Neal, Peter Schlessel, Keith Horn, Sheila Stamps, Teresa Miles Walsh and Martin Luther King III.
PSPCs can target any industry and media / entertainment has its fair share.
Bright Lights Acquisition Corp, a SPAC run by former Dick Clark Prods. CEO Mike Mahan and board co-chairs Allen Shapiro and John Howard began operations in January. Its board of directors also includes singer-songwriter Ciara Wilson, Mandalay Entertainment Group CEO Peter Guber and Endeavor President Mark Shapiro. He is looking for a consumer products, media, entertainment or sports business valued at $ 500-1.5 billion that is ready to grow and go public.
Parent group Thrillist and PopSugar, Nine Media, has launched a SPAC to close digital deals.
Cindy Holland, who recently left Netflix after an 18-year run this year, has joined the board of directors of a new SPAC, Horizon Acquisition Corp II.
John Malone created the SPAC Liberty Media Acquisition Corporation.
Media and entertainment executives Harry Sloane and Jeff Sagansky have launched a series of SPACs in recent years, including the Diamond Eagle and the Flying Eagle Acquisition Corps. Flying Eagle has acquired the Skillz mobile gaming platform and will make it public. Diamond Eagle merged with DraftKings, creating the only purely sports betting company. Playboy will go public again after merging with SPAC Mountain Crest Acquisition Corp. And Gerry Cardinale’s RedBird Capital is launching a SPAC called RedBall Acquisition to target sports media properties, including data analytics companies or possibly a sports franchise.
Hearst CEO and former executive Joanna Coles is seeking acquisitions with her PSPC, Northern Star Acquisition Corp.
Politicians have moved into space. Former House Speaker Paul Ryan is chairman of a SPAC he created called Executive Network Partnering Corp. Earlier this month, former Commerce Secretary Wilbur Ross established his own PSPC, Ross Acquisition Corp. II, with Larry Kudlow on the board.