Private equity firm VMG Partners acquired a minority stake in Solidcore, a provider of pilates-based resistance training, betting that consumers will return to boutique fitness classes once the worst of the pandemic is in the rear-view mirror.
“We are big believers in brands that can create an emotional connection with consumers and become a recurring part of their routine,” McConnell Smith, a VMG partner, said in an interview. “So we’d been tracking Solidcore well before Covid-19 disrupted the fitness category.”
The company, which has around 70 locations in states including New York, North Dakota and Virginia, will use new funding to open studios in the U.S. and abroad, first targeting locations such as London and Canada, Solidcore founder and Chief Executive Officer Anne Mahlum said in an interview. She also sees the West Coast as a candidate for expansion. Mahlum said the pandemic changed her ambition to reach 100 studios by 2020, to 2022.
Mahlum said she didn’t take a salary for three months during the onset of the pandemic, when Solidcore — like many other companies — reduced the pay of some staff and furloughed others, who have since returned. Landlords including Regency Centers Corp. and Federal Realty Investment Trust were “incredible to work with” in part because they understood that Solidcore is a long-term tenant, Mahlum added.
Solidcore in November signed a partnership with Equinox’s digital media platform Variis. Still, Mahlum expects that once the vaccine rollout is further along, the at-home offerings will be a supplement, not a substitute, to in-studio classes. The workouts use a machine dubbed the “sweatlana,” which has similar features to a pilates reformer.
As a result of the transaction, she’ll share $575,000 with 88 full-time staff. Mahlum retains a controlling interest in the company, which has counted Peterson Partners as minority investor since 2017. She’s raised over $70 million from institutional investors and plans to help more female-led founders land financing.
Piper Sandler advised Solidcore on its capital raising, which represents San Francisco-based VMG’s first fitness deal, following investments in wellness-related companies such as Quest Nutrition, Ancient Nutrition and Vega.
“There’s a strong desire to getting back to working out in person because of the quality, efficacy and overall experience,” VMG’s Smith said. “It’ll take time, but certain modalities like Solidcore are better insulated because they’re harder to replicate at home.”
VMG Partners was represented by Winston & Strawn LLP.