· The transaction is expected to close as early as the fourth quarter of 2023
AUSTIN, TX - 
(NewMediaWire) - August 15, 2023 - Interactive Strength Inc. (Nasdaq: TRNR d/b/a “FORME”), maker of premium smart home gyms and provider of virtual personal training services, is excited to announce that it has entered into a non-binding letter of intent and exclusivity agreement to acquire a connected fitness equipment business.
The potential transaction, if consummated, is expected to accelerate FORME’s commercialization path, result in immediate scale across all functions and create a high-growth and profitable platform that sells connected fitness equipment and digital fitness services across B2B and B2C channels.
“We believe this will be a transformational acquisition that can accelerate our commercialization path. Further we believe the combination of these businesses will create tremendous value for both groups of shareholders,” said Trent Ward, co-founder and CEO of FORME. “We expect this transaction can help us achieve immediate scale across all of our cost centers, resulting in a high-growth, profitable platform that sells connected fitness equipment and digital fitness services across B2B and B2C channels.”
This strategic move is also expected to provide FORME and the target company with enhanced cross-selling opportunities and improved penetration into new end markets.
“We are excited about what we are seeing in the B2B channel in our own business. In fact, the strength of the performance in the B2B channel, as well as our belief that the FORME business would benefit from further investment in this area, were key reasons for our interest in the potential acquisition. This transaction sets the stage for FORME to become an industry leader across a range of modalities.”
FORME’s due diligence review of the target acquisition has already commenced, and upon satisfactory completion, the Company intends to proceed towards executing a definitive acquisition agreement and closing the transaction as soon as all closing conditions are met by all parties involved.
Proposed Transaction Highlights:
The proposed acquisition is expected to yield several strategic and financial benefits, positioning the combined entity for further growth:
· Rationale
o Provides immediate scale in all functions (Sales, Engineering, Logistics, Supply Chain, Corporate Overhead)
o Generates material and near-term cashflow for FORME
o Diversifies revenue (products and channels), with significant growth in B2B channel
o Opportunity for strong B2B distribution partner for FORME hardware products
o Solidifies position as the premium platform in the Connected fitness industry
· Pro forma financials
o Combined Gross revenues in 2023 are projected to exceed $10 million
o Combined Gross revenues in 2024 are projected to exceed $25 million
o Cashflow positive and adjusted EBITDA positive by the fourth quarter of 2024
· Consideration
o All of the equity of the target company is anticipated to be exchanged for TRNR equity at close of transaction, and with the same shareholder “lock-up” as pre-IPO shareholders (end of October 2024)
o Earn-out potential for 2024 paid in TRNR equity, with Enterprise Value / 2024 Gross Revenue multiple of approximately 1.2x remaining constant
o Minimal cash for working capital
o Assumption of target debt
· Valuation
o Approximately 1.2x Enterprise Value / 2024 Gross Revenues
o Between 5x and 6x Enterprise Value / EBITDA pro-forma for projected synergies
· Timing
o Close as early as the fourth quarter of 2023
The letter of intent described above is non-binding, and as such, there can be no assurance that the Company will enter into a definitive acquisition agreement or that the terms of any such agreement will not change, or that the proposed acquisition will be consummated at all.
TRNR Investor Contact
ir@formelife.com
TRNR Media Contact
forme@jacktaylorpr.com
About FORME:
FORME is a digital fitness platform that combines premium smart home gyms with live virtual personal training and coaching to deliver an immersive experience and better outcomes for both consumers and trainers. FORME delivers an immersive and dynamic at-home fitness experience through two connected hardware products: 1. The FORME Studio (fitness mirror) and 2. The FORME Studio Lift (fitness mirror and cable-based digital resistance). The Studios uniquely transform to host a variety of workouts and activities, returning to an elegant, full-length mirror when not in use. In addition to the company’s connected fitness hardware products, FORME offers expert personal training and health coaching in different formats and price points through Video On-Demand, Custom Training, and Live 1:1 virtual personal training. FORME is listed on NASDAQ (symbol: TRNR).
Forward Looking Statements:
This press release contains forward-looking statements. Forward-looking statements include all statements that are not historical facts. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “proposed,” “project,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include but are not limited to the following: the anticipated impact and benefits of the potential transaction and expected timing thereof; the proposed terms of the potential transaction; the expectation that the potential transaction, if consummated, will accelerate FORME’s commercialization path, result in immediate scale across all functions and create a high-growth and profitable platform across B2B and B2C channels; internal management projections of the target and the potential impact on the Company’s results of operations (including with respect to the Company’s expectations that 2023 combined gross revenues should exceed $10 million, that 2024 combined gross revenues should exceed $25 million, that by the fourth quarter of 2024, the combined business is expected to be cash flow positive and to have positive adjusted EBITDA, and anticipated cost synergies; the Company’s belief that this will be a transformational acquisition that accelerates its commercialization path and the transaction will create tremendous value for both groups of shareholders; the expectation that the transaction can help the Company achieve immediate scale across all cost centers and provide FORME and the target company with enhanced cross-selling opportunities and improved penetration into new end markets; the anticipated strategic and financial benefits of the potential transaction (including positioning the combined entity for further growth, providing revenue diversification, immediate scale across operational functions, and B2B opportunity); and the anticipated transaction consideration and components and structure thereof;. These forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. These risk and uncertainties include, but are not limited to, the following: our ability to complete the due diligence process and agree to terms for a definitive agreement; our ability to obtain required regulatory approvals and the timing thereof; our ability to consummate the transaction or realize the anticipated benefits thereof; our ability to achieve or maintain profitability; our future capital needs and ability to obtain additional financing to fund our operations; the growth rate, if any, of our business and revenue and our ability to manage any such growth; risks related to our subscription or any future revenue model; our limited operating history; our ability to continue as a “going concern”; our ability to compete successfully; fluctuations in our operating results and factors affecting the same; our reliance on sales of our Forme Studio equipment; our ability to sustain competitive pricing levels; the growth rate, if any, of our target markets and our industry; the ability of our customers to obtain financing to purchase our products; our ability to forecast demand for our products and services, anticipate consumer preferences, and manage our inventory; our ability to attract and retain members, personal trainers, health coaches, and fitness instructors; our ability to expand our commercial and corporate wellness business; unforeseen costs and potential liability in connection with our products and services; our dependence on third-party systems and services; and risks related to potential acquisitions, intellectual property, litigation, dependence on key personnel, privacy, cybersecurity, and other regulatory, tax, and accounting matters, and international operations, as well as the risks and uncertainties discussed in our most recently filed periodic reports on Form 10-Q and subsequent filings and as detailed from time to time in our SEC filings. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements set forth in this release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this press release. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.
View the original release on www.newmediawire.com
