Interactive Strength Inc. (Nasdaq

TRNR) Completes Acquisition of CLMBR, Creating a High-growth, B2B Focused, Connected Fitness Platform

• The combined business is anticipated to generate between $15 million and $20 million in revenue in 2024, driven primarily by B2B sales to gyms, fitness studios and multi-family residential
• Equipment sales are expected to be largely generated by distributors, including WOODWAY, with minimal marketing expenditure
• The business is anticipated to be cashflow positive and adjusted EBITDA profitable potentially as early as the fourth quarter of 2024

AUSTIN, TX, Feb. 07, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire – Interactive Strength Inc. (Nasdaq: TRNR) (“TRNR” or “the Company”), maker of premium smart home gyms and provider of virtual personal training services under the FORME brand, today announced that it has completed the acquisition of substantially all of the assets of CLMBR, Inc., (“CLMBR”) the maker of the first-to-market connected vertical climber.

Trent Ward, Co-Founder and CEO of TRNR, said: “We are thrilled to have acquired CLMBR and its sizeable consumer installed base in this acquisition. More importantly, the move into the B2B channel is expected to add exciting growth to our portfolio of products. We believe this will be a transformational acquisition that can accelerate the Company’s commercialization path.” Ward continues, “We expect this transaction can help us achieve immediate scale across all of our cost centers, resulting in a high-growth, profitable platform that sells connected fitness equipment and digital fitness services across B2B and B2C channels. Additionally, we believe this acquisition could serve as a model to create value going forward.” 

The transaction closed on February 2, 2024.

Transaction Highlights:

The acquisition is expected to yield several strategic and financial benefits, positioning the combined entity for further growth:

• Rationale
  • Expected to provide immediate scale in all functions (Sales, Engineering, Logistics, Supply Chain, Corporate Overhead)
  • Expected to generate near-term cashflow for TRNR
  • Diversifies revenue (products and channels), with significant growth in B2B channel
  • Gaining a strong B2B sales and distribution partner in WOODWAY
• Projected financials
  • Combined revenue in 2024 is expected to be between $15 million and $20 million
  • Run-rate cashflow positive and adjusted EBITDA profitable potentially as early as the fourth quarter of 2024
• Valuation
  • Enterprise value of deal (not including earn-out potential) is $15.4 million
  • Expected to be between 1.0x and 1.3x EV / Projected 2024 CLMBR revenue
  • Expected to be between 3x and 4x EV / Projected 2024 CLMBR EBITDA, as adjusted for synergies
• Structure
  • “Asset deal” (acquiring assets and specific liabilities, decreasing unknown risks)
  • Sellers are rolling all equity into TRNR and no cash is being taken “off the table”
  • “Lock-up” on common shares until the end of October 2024, which is the same lockup period as TRNR pre-IPO shareholders
• Consideration
  • 1.4 million shares of TRNR common equity issued at transaction close
    • Earn-out potential for achieving certain levels of B2B unit sales in 2024, paid in TRNR common equity
  • 1.5 million shares of non-voting Series B preferred equity that is held back for two years against representations and warranties before converting to TRNR common equity in 2026
  • $1.5 million of subordinated debt assumed 
  • $8.0 million of senior debt assumed, with $1.4 million of senior debt paid down

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