In a perfect match of synergies, Lululemon Athletica Inc. the activewear company announced plans to acquire Mirror, a leading fitness company that offers an interactive workout platform that features live and on-demand classes. Lululemon is paying $500 million for the acquisition.
It is not a sudden acquisition as Lululemon had invested $1million in the company a year ago and had been considering the acquisition for some time. The investment agreement also saw Lululemon fitness ambassadors featuring on the streaming site.
Lululemon is at the moment cash-rich and intends to pay for Mirror partly from its liquidity cash of $800 million, its existing $400 million revolving credit facility, and a new one-year, $300 million revolving credit facility.
Mirror’s founder and CEO, Brynn Putman, was a former fitness ambassador with Lululemon. She said, “We are thrilled to officially become a part of the lululemon family. As part of lululemon, Mirror can further strengthen its position and accelerate its growth by leveraging lululemon’s deep relationships with its guests, ambassadors and communities, as well as the company’s infrastructure, including its store network and eCommerce channels, to acquire new users.”
Mirror will operate as a standalone company within Lululemon and Putnam will continue as Mirror’s CEO.
Mirror: A rival to Peloton?
The pandemic has made the move more relevant and logical as more people are now looking for alternatives to gyms and workout classes at home. Now Lululemon can offer the right gear with the right fitness channel to try out the same. Calvin McDonald, Chief Executive Officer, commented, “In 2019, we detailed our vision to be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect. The acquisition of MIRROR is an exciting opportunity to build upon that vision, enhance our digital and interactive capabilities, and deepen our roots in the sweatlife. We look forward to learning from and working with Brynn Putnam and the team at Mirror to accelerate the growth of personalized in-home fitness.”
Mirror has thousands of on-demand workouts, weekly live classes as well as immersive one-to-one personal training on offer. Since its inception in 2018, Mirror has seen a rapid growth in demand for online fitness streaming content.
The Mirror device for streaming comes for $1,495, and customers need to pay $39 as mostly subscription to get the various fitness classes ranging from kickboxing to yoga to meditation. The fitness content company has raised about $72 million in the last two years.
Barclays served as the financial advisor to Lululemon and Fenwick & West LLP and Blake, Cassels & Graydon LLP served as legal counsel. Cooley LLP served as legal counsel to Mirror.
About Lululemon Athletica Inc.
Lululemon Athletica Inc. is an athletic apparel company for yoga, running, training, and other sweaty pursuits. It offers a healthy, comfortable experience, which enables people to live a life they love. The company continually tries to improve its products with expert inputs and feedback from professionals and athletes in local communities.
Mirror is a New York-based startup that zeroed in the new trend of creating an at-home interactive fitness gym with cutting-edge hardware, responsive software, and best-in-class content.