ProForm Fitness Inc. and Weslo Inc., two of the world's largest makers of home fitness equipment, said Tuesday that a Boston-based group, Bain Capital Inc., has agreed to buy the two firms in a deal totaling $450 million.
The investment group also includes Weslo/ProForm co-founders Scott Watterson and Gary Stevenson, along with other executives of the two firms.Watterson said company headquarters will continue to be located here, and Utah manufacturing operations will not be adversely affected by the acquisition. The two companies currently employ some 3,000, of which 2,300 are at the Logan, Smithfield and Clearfield plants.
"We will continue to see the opportunity to create more jobs," said Watterson, "but that's not our primary focus. That primary focus is to be profitable," he told the Deseret News.
"I think the key is to make sure our employee base understands the growth prospects this deal afford us," he said. "It recapitalizes our business and gives us the ability to continue to grow. Bain is an investment company that is interested in being an investment partner and participating in management as invited."
He said the ProForm and Weslo names would continue as brand names, so the public will not see much change in operations.
Watterson and Stevenson are both business graduates of Utah State University. They founded Weslo here in 1977. Under terms of the buyout, Watterson, chief executive officer of Weslo/ProFrom, will become chairman and CEO of Icon Health and Fitness Inc., the new company under which Weslo/-ProForm will fall. Stephenson, former chief operating officer of Weslo/-ProForm, will become chief operating officer and president of Icon.
Fred Beck, chief financial officer of the former entities, will have the same position with Icon.
Bain Capital has been growing aggressively over the past 10 years, acquiring controlling interest in 61 companies since 1984, although Weslo/ProForm is its first venture into physical fitness equipment.
Bain will own 53 percent of Icon, which Watterson says expects to log $500 million in annual sales for the fiscal year ending next May 1 - more than a quarter of the nation's $2.5 billion home-fitness industry.
Bain's direct cash investment in Icon will total some $36 million, said Steed. The founders and executives of Weslo/ProForm will invest an additional $14 million in the company.
Weslo and ProForm have been subsidiaries of Weider Health and Fitness Inc., based in Woodland Hills, Calif., since 1988. Weider will continue to own a unit, based in California, which publishes fitness magazines such as "Shape" and "Muscle & Fitness," along with another unit, based in Salt Lake City, that makes nutritional supplements for body builders.
Watterson said Weslo and ProFrom had been planning a public stock offering earlier this year, but said Bain conviced them that recapitalization was a better option.
Still, he said, a public offering remains an option.
As part of the deal, Icon will buy new licensing rights that will expand the brand names of its predecessor companies, including Jane Fonda. Icon companies make stair steppers, treadmills, home gyms and other physical fitness equipment for home use.