(Bloomberg) -- Two providers of technology for the fitness industry are combining in a bet that people will return in force to in-person exercise as the pandemic eases.
Mindbody Inc., a platform for booking workout and health classes, agreed to buy ClassPass Inc., a monthly subscription service where users book classes at discounted rates and studios fill empty spots. The combination will create a one-stop shop for business owners and consumers. Terms weren’t revealed in the all-stock deal announced Wednesday.
“This acquisition comes at a pivotal time for the wellness industry as it continues to rebound from Covid-19 related closures -- and local and authentic experiences are more important to people than ever,” Mindbody Chief Executive Officer Josh McCarter said in a statement.
In January 2020, ClassPass said its valuation eclipsed $1 billion after raising $285 million from investors including L Catterton, Apax Digital and Temasek Holdings Pte. But when Covid-19 forced studios to close their doors, ClassPass tried to pivot by adding digital classes and vaccine centers to its app.
Mindbody, which provides software to make appointments at gyms, spas and salons, was taken private in a $1.9 billion buyout by Vista Equity in 2019. Bloomberg News first reported potential merger talks between Mindbody and ClassPass in May, and said the two had discussed going public once the deal closed.
In conjunction with the acquisition announced Wednesday, Sixth Street, a firm that has previously backed Airbnb Inc. and Spotify Technology SA, will invest $500 million to accelerate the merged company’s growth.
“The ClassPass network includes many businesses already working with Mindbody,” said ClassPass CEO Fritz Lanman. ”By combining our respective operations, we will create more seamless integrations and unlock new revenue opportunities for business owners using both services.”
The merger will integrate both teams. ClassPass will continue to operate its app and website, and Lanman will serve as president of ClassPass and Mindbody Marketplace.
©2021 Bloomberg L.P.