Sports club and SoulCycle majority owner Equinox Holdings is in discussions to go public, according to multiple people familiar with the talks. The meetings are said to be with as many as 12 special purpose acquisition companies, one of which would provide the business a stock market listing at a valuation of $9 billion or more if a deal can be reached. Equinox Holdings has also held discussions with private equity investors about other alternatives.
“Everyone’s just trying to figure out what to do. There’s a recovery play to be had, which everyone is evaluating,” said one private equity investor who held talks with Equinox and asked not to be named because the information could affect other discussions by the PE firm.
A spokeswoman for Equinox didn’t respond to emails seeking comment.
Equinox, a luxury gym and fitness brand mostly owned by Steven Ross’ Related Companies since 2006, has more than 100 full-service fitness clubs globally. In 2019, it rolled out the first of an announced four luxury hotels, in the Ross-owned Hudson Yards development on Manhattan’s west side. The business also owns most of SoulCycle, a competitor to Peloton, which went public in 2019. Last year, SoulCycle introduced an at-home cycle and class subscription service to rival Peloton, which has a market cap near $34 billion. Equinox also owns discount gym Blink, which has 100 U.S. locations including franchises, as well as the Precision Run and Pure Yoga club brands. In addition to his real estate-focused Related Companies, Ross is the owner of the NFL’s Miami Dolphins.
In a deal last year with venture capital firm Silver Lake, Equinox infused its business with cash to take on Peloton, according to information compiled by S&P Global. The valuation of the Equinox business was $9 billion at the Silver Lake deal, according to one person with knowledge of the transaction.
Equinox finances are only partially disclosed. As of June last year, the company had as much as $1.375 billion in debt and was planning on issuing another $150 million, according to a ratings opinion issued by S&P Ratings on the offering. At that time, the business’s debt was split between a $150 million credit facility due in 2022 and $1.225 billion in two loans due in 2024, according to S&P Ratings, which gave the secured loans ratings of CCC and CC. SoulCycle also had its own credit facility, which Equinox partially guaranteed, according to S&P. A third Ross business had entered an agreement to contribute up to “$125 million cash equity” to cover Equinox’s guarantee of SoulCycle’s debt if needed, according to the ratings agency.
The names of SPACs in talks with Equinox weren’t disclosed. There are at least two dozen sports-related SPACs whose stated target sectors would justify a deal with Equinox, according to the Sportico Sports SPAC Tracker. Since SPACs ultimately have wide leeway to acquire any business that management sees fit, the pool of potential buyers for Equinox is much larger: There are more than 422 SPACs currently searching for acquisition targets, according to researcher SPACalpha.
Recently, Forest Road Acquisition, a SPAC led by three former Disney executives and including Shaquille O’Neal as an adviser, struck a deal to merge two at-home fitness brands—Myx Fitness and Beachbody—and take them public in a $2.9 billion valuation.