Mindbody acquires ClassPass, merger gets $500 million investment

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Mindbody, a B2B search and booking engine for boutique fitness providers, has agreed to purchase ClassPass, a monthly subscription service for fitness classes.

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why it matters: Because it’s one of those mergers that makes a lot of sense not to have. MindBody helps users find local fitness options, but didn’t offer multi-vendor bundles like ClassPass’s Bread and Butter (or black and virgin olive oil in this context).

Investors Information: 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 such as Apex Digital, El Caterton and General Catalyst. New investor Sixth Street is leading a $500 million investment in the combined company.

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Deal Structure: No pricing terms of the all-stock deal were disclosed, but Nerdshala has learned that Mindbody will be between 60%-70% in the combined business, valuing ClassPass “significantly” above that $1 billion.

Bottom-line: “The acquisition comes… as studios reopen with almost 80% of consumers realizing that wellness is more important than ever. Additionally, many markets that have fully reopened are The Mindbody platform is seeing bookings for pre-COVID levels and ClassPass consumer usage. There is a 110% percentile of pre-COVID usage for customers going back to class,” Forbes writes.

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