August 16, 2022

madmenburger

Health for a better future

Francisco Partners Named Health & Fitness Deal of the Year Winner

The acquisition of consumer application MyFitnessPal by private equity firm Francisco Partners from footwear maker Under Armour required a careful and steady execution plan. Fortunately, this intricate process was nothing new for the dealmakers at the tech-focused firm. FP closed the acquisition in October with a purchase price of $345 million.

Handle with Care
Under Armour (Nasdaq: UA) acquired MyFitnessPal, a nutrition and fitness smartphone application that helps users track their diet and exercise habits, for $475 million in 2015. However, as the app developed, technology improvements and reinvestment in innovation were no longer top priorities for the retail-focused parent company. In considering buyers for the app, Under Armour sought one that could complete the carve-out quickly and effectively before the end of the year while also providing a stable long-term home for MyFitnessPal’s employee base. Recognizing the app’s brand value and sizable client base of 200 million users, FP seized on the opportunity.

FP is known for crafting many successful divisional carve-outs, most notably its acquisition and restructuring of Dell’s software group in 2016. The Dell deal was instrumental in FP winning Mergers & Acquisitions’ 2016 Private Equity Firm of the Year. FP has, on multiple occasions, been able to develop an undervalued division within a corporation. This expertise proved to be essential to the MyFitnessPal deal – and to closing the deal during the pandemic.

Track Record
The firm identifies its prior experience with this type of deal as a key factor in its ability to carry out the nuances of the MyFitnessPal transaction. “FP relied on experience gained through more than 40 such divisional carve-outs over two decades to recognize the potential to unlock significant value and drive seamless execution in the carve-out process in order to benefit shareholders, employees, and significantly, end users,” FP founding partner and CEO Dipanjan (DJ) Deb told Mergers & Acquisitions. FP is optimistic about MyFitnessPal’s future growth potential within the fitness app marketplace.