The craze for Special Purpose Acquisition Company (SPAC) continues, and Equinox Holdings is looking for the best offer to go public (IPO) in an area of potential mergers. Equinox Holdings has a majority stake in the fitness company SoulCycle, which competes with the streaming training and exercise equipment company Peloton Inc. (NASDAQ: PTON) and operates a number of fitness clubs and even hotels.
Now the company is about to go public through a merger. What about the potential business that could be useful for investors?
1. Equinox is in discussion with more than 10 SPACs
This week’s news, reported for the first time by SporticoEquinox Holdings is buying from around 12 SPACs to get the best offer for a possible IPO. The company is also not sure whether it will take the SPAC merger route when it goes public. The possibility of using a more traditional private equity firm is also being explored. But with Working week Equinox reports that SPACs collectively control the purchasing power of $ 1 trillion as of March 2021, and it is likely that Equinox will find what it is looking for among these numerous well-funded companies.
2. The company’s valuation is reinforced by expectations
With the noticeable decline in COVID-19 and the reopening of the economy, investors are now looking for good recreational games. An unidentified private equity investor involved in the current Equinox negotiations said Wall Street could put Equinox in that category, with fitness clubs likely to reopen in the near future as demand spikes.
Silver Lake Partners, a public company, provided some of the money to the company last year to challenge the success story of the Peloton meteor fitness sector. At the time, Equinox was worth $ 9 billion. With an expected recovery spurt, the valuation could be even higher (Peloton currently has a market cap of over $ 30 billion).
3. SoulCycle offers outdoor courses
SoulCycle, one of Equinox’s largest brands and a high-end fitness company, is offering outdoor bike classes in 20 cities from mid-March 2021. The move is clearly an attempt to increase sales before COVID-19 is completely defeated, an outdoor venue made possible by the warming of the weather in much of the U.S. makes social distancing and health compliance easier.
However, the company likely still has an uphill battle against Peloton, which established itself as a leader in streaming fitness in 2020 while the pandemic remained on lockdown.
4. The SPAC boom may attract government attention
On the bearish side of the equation, Equinox Holdings may be trying to publicize an investment mechanism that may be under potentially unfavorable scrutiny by the US Securities and Exchange Commission.
With 400+ SPACs currently active, as reported by Benzinga, and investments in SPACs in March that rose 3,043% year-over-year to $ 30.8 billion (with the month not even over), some government investigation is likely inevitable sooner or later.
Rumor has it that the SEC’s Enforcement Department is asking banks for information about the SPACs, which means a serious investigation could be imminent. While there is a small risk that this could short circuit Equinox’s IPO plans, the possibility remains, pending results and actions by the SEC.
5. Equinox challenges Peloton straight away
$ 43 billion private equity firm Silver Lake Partners made a significant investment in Equinox Holdings last February to challenge Peloton in the fitness sector. According to the Fitness Business News Site Club industryThe investment was aimed at developing a robust digital platform, opening 50 new locations annually and possibly offering its own fitness bike models for the home.
The stock company saw the potential for Equinox to compete against Peloton at this point – but as a precaution before Peloton’s scorching bull run in the course of 2020, which was triggered by the complete shutdown of personal gyms and a home fitness boom triggered by COVID-19 risks.
When could Equinox go public?
At this time, Equinox Holdings is only a potential IPO, so detailed information on its performance and that of its various brands is not yet publicly available. It is clear, however, that the company could start at a valuation of $ 9 billion or a little more, and it appears to be considering a merger in the near future with a SPAC as a bridge to the public stock market.
Peloton’s success has many investors interested in cutting-edge fitness companies. With Equinox Likewise Given the potential tailwind from the economic reopening, this is a company worth following in driving the public offering process.
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