- Fitness application company Openfit purchased the majority stake in nutrition company Ladder.
- The company was founded by NBA star LeBron James and actor Arnold Schwarzenegger in 2018.
- In an interview with CNBC, Openfit's CEO Jon Congdon hinted the acquisition could position the company to seek an IPO.
Ladder, a nutritional company found by basketball icon LeBron James and actor Arnold Schwarzenegger, has been sold to technology fitness platform, Openfit, the companies told CNBC.
Openfit CEO Jon Congdon said the the tech company purchased Ladder, buying shares from investors, including investment firm Main Street Advisors. Terms of the deal were not made available.
In an interview with CNBC on Tuesday, Congdon said James and Schwarzenegger would stay on as minority shareholders and help with future promotional content.
"We looking to grow the brand," said Congdon, adding the company would integrate Ladder's nutritional supplements in subscription offerings.
Openfit is a mobile application that monetizes private training and exercise classes through subscriptions. The packages range from roughly $40 for three months to $100 per year. The company says it has approximately 130,000 subscribers.
Congdon said the company is "profitable" but didn't divulge exact revenue. He said, "those numbers could be available in the not so distant future."
Asked if that meant that Openfit is seeking an IPO, Congdon, the co-founder of the fitness company Beachbody (parent company of P90X in-home exercises), said he couldn't comment. He didn't deny the notion, either, adding "all possibilities are open for us, and we're considering all possibilities."
With the acquisition of Ladder, which is on pace for $4 million in sales for 2020, it will pair nutritional supplements with its "live and on-demand fitness programs, personalized nutrition plans and virtual access" to certified trainers.
"We looking at 300% too 400% growth at minimum next year and even more than that in the coming years," Congdon said. "We're hoping that they are a huge part of our revenue base moving forward."
James and Schwarzenegger founded Ladder 2018, aiming to create nutritional products for athletes to combat cramping while in action. The idea stemmed from James' severe cramping in Game One of the National Basketball Association's Finals series in 2014.
"After pushing my body to its limits season after season, I needed a different level of supplements that I could trust to complement my workouts and aid in the recovery process," said James in a statement. "With Ladder, we achieved that. We were able to work with experts to create an incredible line of certified, high caliber supplements for all athletes, but we always recognized that is just one part of the process.
"Now with the reach and resources of the Openfit platform, we're excited about bringing this all together and creating a new level of training and nutrition that fits everyone's individual needs," James said.
"It's in the right hands," added Schwarzenegger in an interview with CNBC on Tuesday. "It's the right move to make."
The former governor of California added he would be involved with future content creation and use his resources to solicit top trainers for Openfit's platform.
"I will do everything for them to be successful, and I think LeBron will do everything for them to be successful," Schwarzenegger said. "We're all partners. We're going to do this together; that's our mission."
With Covid-19 restricting access to gyms and limiting in-person contact, Congdon said exercisers have turned to mobile-based apps for workouts and training.
He said Openfit research found roughly 90% of exercisers who converted to home workouts during the pandemic "have realized that it's as effective or more effective than what they've been doing before."
"We believe at-home fitness is here to stay," Congdon said. "It's fast-tracked what we've always presumed -- whoever makes the living room or the garage as compelling and fun and effective as a gym is going to unlock a lot of value."