Goldman-Backed Echelon Fitness Is Exploring Strategic Options
Goldman-Backed Echelon Fitness Is Exploring Strategic Options
(Bloomberg) -- Echelon Fitness Multimedia LLC, a maker of exercise bikes and other workout equipment, is exploring strategic alternatives that could value the company at more than $1 billion, according to people with knowledge of the matter.
The company tapped an adviser after receiving interest from prospective investors, and is considering options including raising at least $100 million in fresh funding, a sale or a public listing through a merger with a special purpose acquisition company, one of the people said.
Last year, Goldman Sachs Group Inc. led a $65 million financing in Echelon in a transaction that gave its growth-investing arm and North Castle Partners a controlling stake. In 2020, Echelon’s revenue soared more than 500% to exceed $100 million, with its app delivering both live and on-demand classes to more than 100,000 users. Revenue is expected to exceed $200 million this year, one of the people said.
Echelon, based in Chattanooga, Tennessee, and led by Chief Executive Officer Lou Lentine, said last month that musician Pitbull invested in the company in a deal that gives him a dedicated “Ride with Pitbull” channel and involves designing a co-branded bike.
The company, also backed by United Talent Agency, has pitched itself as a more-affordable alternative to Peloton Interactive Inc., and its products are carried by retailers such as Walmart Inc., Target Corp. and Costco Wholesale Corp.
Marissa Mastellone, a spokeswoman for Echelon, declined to comment, as did representatives for Goldman and North Castle.
Some connected-fitness companies, many of which benefited from stay-at-home orders during earlier months of the pandemic, are seeking to capitalize upon heightened investor interest in the sector. Peloton’s shares, for example, have jumped 83% in the past 12 months.
Rhone Capital agreed to make an investment in cycling and endurance training technology firm Wahoo Fitness. Hydrow, which makes a $2,245 rowing machine, is weighing strategic options such as an initial public offering or SPAC merger, Bloomberg News reported last month. And Icon Health & Fitness Inc., which makes NordicTrack and other machines, has tapped banks ahead of an initial public offering.
Industry experts expect that consumers will continue to incorporate some at-home workouts post-pandemic due to their convenience.
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