Stock Purchase Agreement
On October 30, 2020, Under Armour, Inc. (the “Company”) announced that it entered into a Stock Purchase Agreement, dated as of October 28, 2020 (the “Purchase Agreement”), with UA Connected Fitness, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“UACF”) and Measure Buyer, Inc., a Delaware corporation and an entity affiliated with Francisco Partners Management, L.P., a technology-focused private equity investment firm (the “Purchaser”), pursuant to which the Company will sell to the Purchaser its MyFitnessPal business through a sale of all of the issued and outstanding shares of common stock of UACF, subject to the terms and conditions of the Purchase Agreement (the “Sale”).
The aggregate purchase price for the Sale is $345 million, of which $215 million is payable at the closing of the Sale and up to $130 million in earnout payments which are based on the achievement of certain revenue targets over the three-year period following the closing date as set forth in the Purchase Agreement. The purchase price is subject to working capital and other customary adjustments. The potential earnout payments include up to $35 million payable in 2022, $45 million payable in 2023 and $50 million payable in 2024.
The Purchase Agreement also contains customary representations and warranties and covenants by each party thereto, including, among other things, by UACF with respect to the operation of the MyFitnessPal business between the signing of the Purchase Agreement and the closing of the Sale. The Board of Directors of the Company unanimously approved the Purchase Agreement and the transactions contemplated thereby, including the Sale. The Sale is currently expected to close during the fourth quarter of 2020, subject to applicable regulatory approvals (including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and other customary closing conditions. The Company will also enter into a customary Transition Services Agreement with UACF at the closing of the Sale.
On October 30, 2020, the Company issued a press release to announce the signing of the Purchase Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Management Change
In connection with the announcement of the Sale, the Company announced that Paul Fipps, Chief Experience Officer, will be leaving the Company on March 1, 2021. Mr. Fipps currently oversees the Company’s Connected Fitness operating segment, of which MyFitnessPal represents a significant portion of its revenue, and has played a critical role in overseeing the execution of the Sale. In his most recent role, Mr. Fipps also had responsibility for the Company’s overall consumer experience and digital and e-commerce strategy. Mr. Fipps will serve in a transitional oversight role for the MyFitnessPal business prior to the closing of the Sale, and then in an advisory capacity for the Company until his departure.
Forward Looking Statements
Some of the statements contained or incorporated by reference herein regarding the Sale and expected timing of the completion of the Sale and any other statements about future expectations constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In many cases, you can identify forward-looking statements by terms such as “will,” “expect,” “believe,” “should”
