Mindbody (MB) agreed to be acquired by San Francisco-based private equity firm Vista Equity Partners in a definitive agreement signed today. The technology platform for the fitness, beauty and wellness industries will be purchased for a total value of about $1.9 billion. Following this, the stock jumped over 67% in the premarket.
Mindbody said its shareholders will get $36.50 in cash per share as all its outstanding shares of common stock will be bought by Vista. The board of directors of Mindbody unanimously approved the deal and recommended the stockholders to vote in favor of the transaction.
The transaction is expected to close in the first quarter of 2019. This is subject to the customary closing conditions, including the approval of Mindbody stockholders and antitrust approval in the US.
Mindbody operates a cloud-based business management software and payments platform for the small and medium-sized businesses in the wellness services industry. The San Luis Obispo, California-headquartered company offers its software platform to its subscribers as a subscription-based service.
The company could seek alternative acquisition proposals as the deal transaction includes a 30-day “go-shop” period that permits the board and financial advisors to actively initiate, solicit, encourage and potentially enter negotiations with other parties.
And, Mindbody will have the right to terminate the deal when entering into a superior proposal. There can be no assurance that this 30-day “go-shop” will result in a superior proposal.
Qatalyst Partners is serving as the exclusive financial advisor and Cooley LLP is serving as legal advisor to Mindbody. Vista’s legal advisor is Kirkland & Ellis LLP.
In the recent third-quarter, Mindbody reported a wider loss due to higher operating expenses as well as an increase in interest expense. However, revenue jumped 37% as it delivered the highest average monthly subscription revenue for new subscribers. The company expected to grow its target market customer base, lift platform partnerships and expand its consumer brand into 2019.
Recently in mid-November, the company appointed Sunil Rajasekar as Chief Technology Officer, reporting to CEO and Co-founder, Rick Stollmeyer. Rajasekar had previously served as vice president and general manager leading engineering and product management for the seller experience at e-commerce giant eBay.
Shares of Mindbody ended Friday’s regular session down 4.57% at $21.72 on the Nasdaq. The stock has fallen over 28% in the year so far and over 48% in the past three months.
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