Three years after life as a public company Mindbody, the software company focused on the fitness market is going private in a deal with private equity firm Vista Equity Partners.
The $1.9 billion all-stock deal ends Mindbody’s run as a public company with shareholders getting $36.50 a share in the deal. That marks a 68% premium to where the stock was trading the day before the deal was announced late last month.
While both sides expect the transaction to close during the first quarter there is a thirty day go shop period in which Mindbody can seek a competing offer. If it finds one it can terminate its agreement with Vista Equity fee-free.
Mindbody’s software powers the reservation platforms of fitness facilities, yoga studios, and salons around the country. And while it is a leading player in the space, it is betting it can grow faster under the ownership of Vista Equity Partners. After all, the PE firm is known for purchasing software companies and improving profitability.
Mindbody's purpose is to help people lead healthier, happier lives by connecting the world to fitness, beauty, and wellness," Rick Stollmeyer, co-founder and CEO of the company, said in a press statement announcing the deal: "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."
CEO Assures Staff No Layoffs Coming
Given Vista Equity’s penchant for exerting profits out of companies it acquires, concerns abound that layoffs are coming to Mindbody’s staff. It’s something that Stollmeyer attempted to quell in a letter to the staff regarding the deal. According to a report in The San Luis Obispo Tribune, Stollmeyer said in the email that no layoffs are impending “While Vista is acquiring Mindbody because of the strength of our products and services, our customer base and the strength of the market opportunity — they know that the only durable asset of a software company is its people (you), and they’re looking forward to working with the entire Mindbody team. There are no layoffs planned,” wrote Stollmeyer. He said the PE firm agreed to keep salaries and bonuses the same for at least a year following the purchase.
Vista Equity’s purchase of Mindbody comes at a time when software market m&a is heating up. At the same time that PE firms are on the hunt for more software buys a growing list of software startups are gearing up for initial public offerings. For Mindbody, the company that’s been there and done that thinks staying out of the public scrutiny is the best path forward.