Why this SPAC share at Beachbody is flexing its muscles today


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What happened

Special Purpose Acquisition Companies (SPACs) have been ubiquitous lately for mergers in the electric vehicle sector. But a deal was announced today with what may be a better-known company. Shares in Acquisition of forest roads (NYSE: FRX) were up 7.8% at close of trading on Wednesday after SPAC announced plans for a three-way merger that will bring The Beachbody Company public.

so what

SPAC announced that it intends to complete the merger with Beachbody and MYX Fitness valued at nearly $ 3 billion after the boards of Beachbody and MYX Fitness unanimously approved the transaction.

Image source: Getty Images.

What now

The combination aims to capitalize on the popularity of home fitness applications. “With brands such as P90X, INSANITY and 21 Day Fix, Beachbody has consistently expanded its market share over the past two decades through its proven model of integrating the most comprehensive library of premium fitness content with easy-to-understand dietary recommendations and nutritional supplements. Forest Road said in a statement.

The newly merged company will have 2.6 million paying digital fitness subscribers with 96% monthly retention. Through the combination of digital subscriptions, connected fitness and growing consumer demand for health and wellness, Forest Road believes it is opening up a growing market segment.

It believes a valuation of twice estimated 2022 earnings is an attractive entry point for investors. Today’s positive (but subdued) development of the share offers investors the opportunity to get close to this valuation.

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