Vista Equity Partners to Acquire MINDBODY in $1.9 Billion Cash Deal

Vista will pay $36.50 per share to acquire the company, a 68 percent premium over Friday's share price.

Subscription News: Vista Equity Partners to Acquire MINDBODY in $1.9 Billion Cash Deal


Merry Christmas to MINDBODY! That’s what investors in the fitness, spa and beauty salon software company are saying. On Christmas Eve, Vista Equity Partners, an investment firm focused on software, data and technology businesses, agreed to buy MINDBODY (NASDAQ: M) for $1.9 billion in an all-cash deal. Shareholders will receive a premium price of $36.50 per share, a 68 percent premium over MINDBODY’s share price of $21.72 at closing on December 31, 2018.

“MINDBODY’s purpose is to help people lead healthier, happier lives by connecting the world to fitness, beauty and wellness,” said Rick Stollmeyer, co-founder and CEO of MINDBODY, in a December 24 news release. “We are thrilled to provide immediate liquidity to our shareholders at a significant premium to market prices and to leverage Vista’s resources and deep expertise to accelerate our growth while achieving that purpose more effectively than ever before.” 

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MINDBODY’s board of directors have unanimously approved the deal and are encouraging shareholders to accept the deal as well. One of the terms of the agreement include a 30-day period in which MINDBODY can seek other offers and proposals. MINDBODY can terminate the agreement with Vista at any point during this 30-day window. Subject to standard closing conditions and shareholder approval, the deal is expected to close in the first quarter of 2019.

Brian Sheth, co-founder and president of Vista, also commented on the deal.

“MINDBODY’s position as the leading technology platform for the fitness, beauty and wellness industries makes it an ideal addition to the Vista family of companies,” said Sheth. “We look forward to partnering with Rick and the entire MINDBODY team to deliver innovation to customers that will help grow their businesses and to consumers who depend on MINDBODY to strengthen their health and well-being.”

Subscription News: Vista Equity Partners to Acquire MINDBODY in $1.9 Billion Cash Deal


MINDBODY is a technology platform designed specifically for fitness, beauty and wellness services. It helps small businesses manage and market their businesses and process payments, while also helping customers connect with fitness, beauty and wellness providers. While originally designed for small businesses and enterprises, MINDBODY also provides scalable solutions for enterprise-sized and multi-location businesses.

Among its services are branded apps, so businesses can develop their own customized apps that meets their individual needs. A customized app can improve customer engagement and retention, offer real-time scheduling, help with membership management and deliver performance metrics, starting at $250 a month at the Essential and Accelerate software levels.

Founded in 2001, MINDBODY is based in San Luis Obispo, California. The company went public at $14.00 a share on June 20, 2015, according to Crunchbase. The company has raised $114.5 million in funding over eight rounds. The company has acquired five companies since February 2015: Fitness Mobile Apps (2015), HealCode (2016), Lymber (2017), FitMetrix (2018), and Booker (2018). Crunchbase reports that the MINDBODY app has had more than 357,000 app downloads in the last 30 days, representing monthly download growth of 4.43 percent.

In early November, MINDBODY reported its third quarter 2018 financial results. Here are a few highlights from that report:

  • Total revenue was $63.8 million, a 37 percent increase year-over-year.
  • Subscription and services revenue was $40.8 million, a 44 percent increase year-over-year.
  • Payments revenue was $22.0 million, a 24 percent increase year-over-year.
  • GAAP net loss was $17.2 million, or $0.36 per share, compared to a GAAP net loss of $3.6 million, or $0.08 per share for the same period last year.
  • At the end of the quarter, MINDBODY had 67,364 subscribers with average monthly revenue per subscriber of $309. Subscribers are unique physical locations or individual practitioners with active subscriptions to MINDBODY, Booker of FitMetrix.

Subscription News: Vista Equity Partners to Acquire MINDBODY in $1.9 Billion Cash Deal


Insider Take:

Though the news release did not specify how the agreement impacts operations, it looks like things may continue as they are currently. For MINDBODY, this means they will have significant capital to support their operations and to possibly expand. The significant cash infusion will take the company out of the red and into the black, creating a nice investment for Vista and a great opportunity for MINDBODY to continue to fulfill its mission.