Beachbody Is Going Public in a Three-Way Merger, Expands Its Reach

Beachbody Company Group LLC houses fitness and media brands including exercise and coaching programs and supplements. Founded in 1998, the company encompasses P90X, Shakeology, 21 Day Fix, and Beachbody On Demand. Soon, Beachbody will become a publicly-traded company.  

Beachbody announced a definitive agreement to go public through a three-way merger. The SPAC Forest Road Acquisition Corp. (FRX) and Myx Fitness Holdings LLC will complete the merger with Beachbody during the second quarter of 2021.  

Since Beachbody has the component of signing up “coaches” to promote the company’s fitness programs and products, many people wonder if it's a “pyramid scheme” or MLM (multi-level-marketing) company. Herbalife, Avon, and Amway are some well-known MLM companies.  

By definition, Beachbody is an MLM company. Coaches conduct direct sales to other customers and earn commissions on every product they sell. More lucrative paydays often come from recruiting new coaches or marketers.   

Not all MLM companies are also pyramid schemes. MLM companies can be legit, but pyramid schemes aren't. Spotting the difference can be a challenge. The FTC says that pyramid schemes focus more on recruitment than on sales of an actual product. Also, a lack of retail sales is a “red flag that a pyramid exists.”  

Other warning signs of pyramid schemes include a greater focus on recruitment than sales, predatory recruitment tactics, and requirements to buy large amounts of inventory. 

Beachbody will go public through the merger with Forest Road and Myx Fitness to become The Beachbody Company. The transaction should be finalized during the second quarter of 2021. The Beachbody Company plans to trade on the NYSE under the new ticker symbol "BODY."  

The Beachbody Company will be the parent company of three content and tech businesses — Beachbody On Demand, Openfit, and Myx. The deal gives the company a pro forma value of $2.9 billion. It adds $420 million in cash to the balance sheet, including a committed PIPE of $225 million from investors like Fertitta Capital and Fidelity.  

“We have seen incredible digital growth in recent years, which was further fueled in 2020 by a structural and lasting shift in how people embrace health and fitness,” stated Carl Daikeler, Beachbody's CEO and co-founder, in the press release announcing the merger. 

Forest Road is a SPAC, sometimes called a blank-check company. SPACs are formed with the specific purpose of raising capital to acquire another company. The Forest Road SPAC IPO raised $300 million in November 2020.  

Meanwhile, Myx Fitness is a fitness platform that provides at-home workout equipment and a subscription model similar to Peloton and SoulCycle, but at a lower price point. Rolling Stone called the Myx Plus bike one of the best alternatives to Peloton.  

Prior to the merger, investors can buy stock in the SPAC FRX. After the $2.9 billion deal is finalized in the coming months, investors will be able to purchase shares of Beachbody directly on the NYSE under the ticker symbol "BODY." The transaction will help fuel Beachbody’s international expansion and the potential for scaling its business.