BowFlex files for bankruptcy, to be acquired by Johnson Health Tech

BowFlex, the at-home fitness equipment manufacturer, has declared bankruptcy and reached an agreement with Johnson Health Tech to purchase its assets for $37.5 million. This move comes as companies in the home exercise sector, such as Peloton, face challenges post-pandemic. BowFlex attributed its financial difficulties to the aftermath of COVID-19 and ongoing economic pressures. Johnson Health Tech, known for producing similar exercise equipment, is set to acquire BowFlex, aiming to preserve value for stakeholders.

Transaction Snapshot

  • Deal value: $37.5 million
  • Deal multiples: N/A.
  • Deal type: Asset purchase
  • Investors: Johnson Health Tech, a Taiwan-based company.

BowFlex, established almost forty years ago and rebranded from Nautilus to BowFlex in November, experienced a surge in demand during the pandemic but struggled with excess inventory and competition. The company, facing a saturated market and higher interest rates, has assets of $140 million against liabilities of $126 million. It had previously sought to streamline operations by laying off staff and selling its Nautilus brand. A bankruptcy auction is planned, with Johnson Health Tech serving as the main bidder, but the door remains open for higher offers. BowFlex has also secured $25 million in debtor-in-possession financing to maintain operations during this period.

The fitness industry has seen significant shifts, with consumers returning to gyms and the rise of weight-loss drugs affecting demand for home workout equipment. BowFlex's challenges were compounded by compliance issues with the NYSE and a significant debt load. The acquisition by Johnson Health Tech, which also owns Matrix, Horizon Fitness, and Vision Fitness brands, offers a potential path forward for the struggling company.

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