Under Armour Inc. has acquired two online fitness and wellness companies, MyFitnessPal and Endomondo, spending $560 million to build what it describes as “the world’s largest digital health and fitness community.”
The fast-growing Baltimore-based performance apparel marketer said it paid $475 million for San Francisco-based MyFitnessPal and access to its community of over 80 million registered users.
Additionally, it said that last month it completed the purchase, heretofore not disclosed, of Copenhagen-based Endomondo for $85 million. The Danish concern has about 20 million users, primarily located in Europe.
Under Armour bought Austin-based MapMyFitness for $150 million in late 2013 and has focused on building on its 31 million users to create a connected fitness platform since that acquisition.
The three acquisitions give the company more than 120 million users in the fitness and wellness sector. MyFitnessPal will supplement the current offerings from the company’s UA Connected Fitness platform to include nutrition tools.
“Similar to MapMyFitness, Endomondo and MyFitnessPal have established track records of unmatched equity, expertise and passion in the fitness and nutrition space, and they are ideal partners to enable Under Armour to provide data-driven, proactive solutions to help athletes of all levels lead healthier and more active lifestyles,” said Kevin Plank, chairman and chief executive officer of Under Armour.
When UA disclosed its plan to buy MapMyFitness, Plank lauded the community the acquired company had forged “in the connected fitness space, and together we will serve as a destination for the measurement and analytics needs of all athletes.” That purchase made the company “better positioned to design open, digital products for the athlete of tomorrow and become more proactive in providing solutions that will help people across the world lead healthier lifestyles.”
Endomondo will retain its offices in Copenhagen, and MyFitnessPal is expected to remain at its San Francisco base following the closing of the transaction, expected during the first quarter. UA is funding the MyFitnessPal purchase through an expanded term loan and revolving credit facility and cash on hand, the company said.
About 80 percent of Endomondo’s users are located outside the U.S. The company uses GPS and other advanced technologies that allow users to map, record and share their workouts.
Under Armour disclosed the acquisitions as it reported fourth-quarter financial results that exceeded analysts’ consensus estimates. In the three months ended Dec. 31, the company reported net income of $87.7 million, or 40 cents a diluted share, 36.7 percent above the $64.2 million, or 30 cents, reported in the final quarter of 2013. Revenues expanded 31.1 percent to $895.2 million from $682.8 million.
Analysts had expected earnings of 39 cents a diluted share on revenues of $849 million. For the full year, net income rose 28.2 percent to $208 million, or 95 cents a diluted share, as revenues flew past the $3 billion mark, rising 32.3 percent to $3.08 billion.
For 2015, the company projected operating income of between $397 million and $407 million on revenues of about $3.76 billion, matching analysts’ expectations.
Shares, up 1 percent to $73.57 during regular trading hours, slipped 1 percent in the first two hours of after-hours trading.