The closure of gyms and fitness clubs due to the Covid-19 pandemic has led many shut-in Americans to splurge on home-workout equipment and subscriptions, boosting sales of companies such as Mirror and Peloton Interactive Inc.
Lululemon is paying $500 million to acquire a home fitness startup, India bans TikTok and Amazon Prime Video is the latest streaming service to add a co-viewing experience.
Brynn Putnam will continue as Mirror's CEO, reporting to McDonald. New York-based Mirror, known for its ubiquitous subway ads, also offers customers live classes and on-demand workouts, mimicking what they might have once paid a personal trainer at the gym to oversee. Earlier this year, Putnam told the Brew's Business Casual podcast she envisioned Mirror being "the next iPhone".
The deal builds on a partnership between the two companies that began in mid-2019 when Lululemon made an initial investment in Mirror.
Mirror will operate as a standalone company within Lululemon and retain its chief executive following completion of the deal, the companies said Monday in a statement.
Putnam, founder and CEO of Mirror, said he's "thrilled to officially become a part of the Lululemon family". He added that Lululemon could leverage its global store base and e-commerce capabilities to sell Mirror, which is now only available in the U.S.
The purchase price is expected to be paid from the company's primary sources of liquidity, which include over $800 million in cash, its existing $400 million revolving credit facility and a new one-year, $300 million revolving credit facility.
Barclays served as the financial advisor to Lululemon and Fenwick & West LLP and Blake, Cassels & Graydon LLP served as legal counsel.