The smart home gym company’s stock has fallen precipitously since it went public in April
Interactive Strength Inc., doing business as Forme, announced a non-binding letter of intent and exclusivity agreement to acquire an unnamed connected fitness equipment business. The smart home gym maker and virtual personal training services provider is struggling on Wall Street but says the potential transaction will accelerate its commercialization path.
The deal is expected to close in Q4 of this year.
Despite the seemingly waning trend of connected fitness hardware, Forme projects its strategy will pay off.
According to Forme’s internal management projections, the fitness maker predicts a combined gross revenue to exceed $10 million in 2023 and over $25 million in 2024. By the fourth quarter of 2024, the company says the combined business is expected to be cash flow positive.
“We believe this will be a transformational acquisition that can accelerate our commercialization path,” said Trent Ward, co-founder and CEO of Forme. Ward added that the combination of the businesses will create “tremendous value” for both groups of shareholders.
“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,” Ward added.
The deal is also expected to provide both Forme and the connected fitness company with cross-selling opportunities and access to new end markets.
“We are excited about what we are seeing in the B2B channel in our own business,” Ward said. “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 has confirmed its due diligence review of the target acquisition has already begun.
The fitness equipment maker recently reported its second quarter 2023 results, incurring a net loss of $13.6 million for the quarter, compared to a net loss of $11.9 million for the same period in 2022, which the company says is primarily due to expenses incurred in connection with its IPO. Forme went public in April, with its shares falling 17% on its first day of trading and 81% as of Tuesday night.
Courtney Rehfeldt has worked in the broadcasting media industry since 2007 and has freelanced since 2012. Her work has been featured in Age of Awareness, Times Beacon Record, The New York Times, and she has an upcoming piece in Slate. She studied yoga & meditation under Beryl Bender Birch at The Hard & The Soft Yoga Institute. She enjoys hiking, being outdoors, and is an avid reader. Courtney has a BA in Media & Communications studies.