Private-equity firm Vista Equity Partners is adding to its portfolio of software companies by acquiring Mindbody, a maker of business management software, for $1.9 billion.
Mindbody, which is based in San Luis Obispo, California, provides management tools for fitness and yoga studios, spas, and beauty salons. It went public in 2015 and reported revenues of $182.6 million in 2017 but its stock had fallen 49% over the last three months through Dec. 21.
Vista has agreed to pay $36.50 for the company, a 68% premium to the undisturbed closing price on Friday. In trading Wednesday, the stock rose 0.6% to $36.04.
“We are thrilled to provide immediate liquidity to our shareholders at a significant premium to market prices and to leverage Vista’s resources and deep expertise to accelerate our growth while achieving that purpose more effectively than ever before,” Mindbody CEO Rick Stollmeyer said in a news release.
Vista bought Apptio, another business management software maker, for $1.94 billion last month.
“Mindbody’s position as the leading technology platform for the fitness, beauty, and wellness industries makes it an ideal addition to the Vista family of companies,” said Brian Sheth, co-founder and president of Vista, said.
Mindbody, which employs about 1,500 people around the world, spent recent years buying up a slew of other businesses. This year alone, it bought performance tracking company FitMetrix for $15.3 million and Booker Software for $150 million.
According to the San Luis Obispo Tribune, Mindbody seemed poised at the end of 2017 to turn a profit for the first time since going public, but “the cost of all those acquisitions pushed it further and further away from the black.”
In the third quarter of this year, the company’s reported net loss widened to $17.2 million from $3.6 million in the year-ago period. Total revenue rose 37% to $63.8 million.
“Our recent acquisitions have introduced greater operational challenges than expected in the back half of the year,” Stollmeyer said. “Yet we achieved multiple successes in Q3, are in a unique strategic position and are excited about our long-term growth opportunities.”