Interactive Strength acquires Sportstech in strategic deal

Interactive Strength, Inc., a leader in electronic and electrical equipment manufacturing, has entered into a significant agreement to acquire Sportstech Brands Holding GmbH. According to InvestingPro data, the company, currently valued at $1.78 million in market cap, is trading below its Fair Value. Announced on Monday, the transaction includes an initial investment of $15 million and three optional investment tranches, subject to performance metrics.

The initial investment will give Interactive Strength approximately a 99.8% stake in Sportstech through a capital increase with the issuance of Series D Non-voting Convertible Preferred Stock. While the company's financial health score is currently rated as weak by InvestingPro, analysts anticipate 15.11% revenue growth for fiscal year 2024.

The conversion of this investment into common stock will be set on June 15, 2026, based on a volume-weighted average price from the preceding 20 trading days, adhering to the Nasdaq Minimum Price Rule.

The deal also outlines three optional investments, A, B, and C, with capital increases up to $10 million, $10 million, and $20 million respectively. These investments are contingent on Sportstech's EBITDA performance in the EU and the US and will be vested based on specific EBITDA targets multiplied by predetermined factors.

The pricing for these optional investments will similarly be determined on June 15 of 2026 and 2027, using the volume-weighted average price method in compliance with Nasdaq rules.

In conjunction with the initial investment's closure, Mr. Ali Ahmad, the sole shareholder of Sportstech, is set to join the Board of Directors of Interactive Strength.

This strategic acquisition is detailed in a Binding Transaction (JO:TCPJ) Agreement filed with the SEC and is expected to enhance Interactive Strength's market position and product offerings. With current gross profit margins at -125.31% and a current ratio of 0.39, subscribers to InvestingPro can access 16 additional key insights about the company's financial position.

The agreement is documented in the company's recent 8-K filing, which provides the transaction's full terms and conditions. The acquisition is a significant step for Interactive Strength as it aims to expand its footprint in the electronic and electrical equipment sector.

The information for this article is based on a press release statement.

In other recent news, Interactive Strength Inc., also known as TRNR, has announced a series of strategic financial moves. The company has signed an agreement to acquire Sportstech Brands Holding GMBH, a German fitness company, which is expected to generate over $50 million in revenue for TRNR in 2025.

Additionally, TRNR has restructured its outstanding debt through the issuance of new secured promissory notes and has also negotiated an agreement with Vertical Investors, LLC to settle a debt obligation by issuing additional shares.

In a related development, the company has revised the terms of its existing debt and amended the conversion price of its preferred stock. This includes extending the maturity date of a $4 million senior secured convertible promissory note and changing the conversion price of its Series C Convertible Preferred Stock.

Furthermore, TRNR has announced an extension to the maturity date of its outstanding debt and conversion of equity securities, allowing for up to three 30-day extensions to the maturity date of its Amended and Restated Senior Secured Convertible Promissory Note.

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