Nearly five months after a last-minute delay to an IPO slated to value the company at over $6.5 billion and after suffering through two rounds of layoffs in the past 90 days, Logan-based iFIT Health & Fitness now claims it is on "strong financial footing" after landing a $355 million investment from L Catterton, the self-proclaimed "largest and most experienced consumer-focused private equity group in the world."
At noon yesterday, Logan, Utah-based iFIT Health & Fitness announced it had landed a $355 million investment funding from L Catterton, the Greenwich, Connecticut-based investment company that claims to be the "largest and most experienced consumer-focused private equity group in the world."
Yesterday's announcement comes nearly five months to the day after iFIT announced it had postponed its long-awaited Initial Public Offering, an IPO projected to value the "mission-driven fitness technology company" at over $6.5 billion.
Instead ...
- The IPO was shelved due to "adverse market conditions" in early October,
- Followed by an undisclosed number of layoffs in December (as reported by The Herald-Journal), and
- Another separate round of layoffs last week (also reported by The Herald-Journal).
With iFIT's challenges of the past five months,
Bloomberg is reporting that the valuation of the Logan-based firm has fallen "... by about 60% to less than $3 billion after raising (the) new capital...."
However, neither iFIT nor L Catterton provided any details in yesterday's announcement about the terms or conditions associated with the funding round, although Bloomberg reports that it consisted of a combination of debt and equity.
In fact, the only other disclosure of significance from the announcement was that after 45 years of service with the firm, Co-Founder Scott Watterson has stepped down as CEO of iFIT, but will remain as the Chairman of the Board.
{NOTE: This is something the company claimed in the press release had been "previously planned."}
Concurrently, two of iFIT's C-Level execs were named as co-Presidents of the company:
- Steve Barr (the Chief Financial Officer), and
- Mark Watterson (the Chief Experience Officer).
{NOTE: No word on whether or not either or both will continue in their prior roles, respectively.}
Clues from iFIT's News Release
There are, however, some clues that can be gleaned from the press release about future plans for the FitTech company.
Specifically, look for iFIT (under significant guidance/involvement from L Catterton) to put more "... focus and investment in growing iFIT's
- "Leading brands,
- "Content library, and
- "Product offerings
"all with the sole purpose of enhancing the member experience."
According to yesterday's news release, iFIT currently has 7.3 million members in more than 120 countries.
It also appears from the release that L Catterton will drive the company to greater profitability through improved "efficiency measures."
Last of all, iFIT dropped a tidbit in the release that it has
"... also amicably resolved its outstanding litigation matter with one of its shareholders."
That would be the $300 million patent infringement lawsuit brought against iFIT in January by an affiliate of its investor Pamplona Capital Management.
A Takeaway Summary and Analysis from Yesterday's iFIT Press Release
- iFIT has raised $335MM in debt and equity;
- The funding puts iFIT on a stronger footing than before;
- iFIT's CEO/Co-Founder (Scott Watterson) has stepped down from day-to-day management of the firm;
- iFIT now has two co-Presidents;
- Under L Catterton "guidance," iFIT will spend more time on growing its top brands, content, and products;
- iFIT's $300MM lawsuit with Pamplona has been "amicably" settled; and last of all
- Do NOT expect iFIT to "go public" any time soon.
Were I a Betting Man, I would guess the soonest iFIT might be ready to test the IPO waters once again would be three to four years from now.
However, I suspect it's more likely that iFIT will be sold to another Private Equity Group instead.
But either way, both scenarios are a long way off.
In the meantime, looks like iFIT has resolved a LOT of PROBLEMS, problems that prevented its IPO back in October 2021.
P.S. One Last Thing
If you're not familiar with L Catterton, its website explains that it was formed in 2016 when three market leaders
- Catterton (a leading consumer-focused private equity firm);
- LVMH, (a world leader in high-quality products); and
- Groupe Arnault, (the family holding company of Bernard Arnault)
joined forces to create a joint-venture investment company, aka L Catterton).
Additionally, the website says
"... L Catterton enjoys a special relationship with LVMH and its family of brands, with both organizations actively collaborating in areas such as consumer insights, brand strategies, retail expansion and economies of scale across the collective portfolio."
Sounds like a very intriguing partnering prospect for iFIT, especially for its leading brands, products and content.
