With attendance to in-person fitness classes on the rebound, Mindbody said it will acquire ClassPass in an all-stock deal.
Mindbody is often described as something akin to the OpenTable of the fitness world: Gyms and fitness studios use its backend software to help organize classes and bookings. ClassPass, on the other hand, is used by consumers to sign up for workout classes on a subscription basis. More recently, ClassPass has expanded to work with beauty salons and other wellness providers.
Financial terms were not disclosed. However, Axios reported that Mindbody will hold between a 60% to 70% stake in the combined business. Before the pandemic, ClassPass had been valued at more than $1 billion. While in 2019, Mindbody was taken private in a $1.9 billion buyout by Vista Equity.
“The future is hybrid,” ClassPass CEO Fritz Lanman said Thursday on CNBC’s “Squawk Box.” “There are some people who really want digital [workouts], some want in-person only, and there are some who want both.”
“The elegance of this partnership is ClassPass has a digital product solution for those who want that, as does Mindbody,” Lanman added. “But … consumers are eager to get back to in-person, we know that.”
The merger will create a sort of one-stop shopping experience for both business and consumers to get their fitness fix, from thousands of boutique studios and gyms around the country.
As part of this deal, studios on ClassPass that had not been using a booking software previously can now sign up with Mindbody. And for Mindbody, its consumer-facing business will have access to everything that ClassPass offers.
According to Mindbody CEO Josh McCarter, the company’s next plans include expanding internationally and investing in a stronger corporate wellness offering. Also on Wednesday, the global investment firm Sixth Street said it agreed to invest $500 million in the merged business.
“That financing really positions us well to do some consolidation in the industry, as well as invest in our own product development,” McCarter said.