UnderArmour sells MyFitnessPal for $345 million, bets on MapMyRun and connected running shoes
Under Armour said it will sell its MyFitnessPal unit to Francisco Partners in a deal valued at $345 million.
The company said the sale was part of its ongoing transformation and "reduces the complexity of our consumer's brand journey."
MyFitnessPal has more than 200 million users. Under Armour said it will sunset its Endomondo fitness platform but keep MapMyFitness, which includes MapMyRun and MapMyRide. Going forward, MapMyFitness and Under Armour's connected footwear will lead its digital strategy.
Patrik Frisk, Under Armour CEO, said there are 1 million connected shoes linked with MapMyRun. "This is an accomplishment that we are incredibly proud of as we drive deeper into the intersect of data, connectivity, product and experiences," said Frisk.
In 2015, Under Armour spent $710 million for the three fitness app companies in a bid to combine data about fitness, nutrition and sleep into an analytics platform that would create a flywheel for the company's athletic gear.
However, Under Armour's core business has lagged rivals like Nike and made its connected fitness unit expendable.
Frisk said:
MyFitnessPal has an impressive record of innovation and strong user growth that has enabled it to sustain its leadership position and scale as one of the world's most popular food and fitness tracking apps. However, as we work to more sharply define our strategy over the past few years, it became evident that MyFitnessPal did not fully align as a core asset with our target consumer needs, the focus performer. In this regard, from an under Armour perspective, we believe this divestiture sharpens our long-term digital strategy by simplifying our consumers' brand journey and increases our ability to better harness the power of MapMyFitness platform as we work towards a singular cohesive UA ecosystem.
For the nine months ended Sept. 30, Under Armour's Connected Fitness unit had revenue of $102.6 million with operating income of $14 million.
Under Armour's third quarter revenue was flat at $1.4 billion as apparel revenue fell 6%. Footwear revenue was up 19% and accessories were up 23%. Net income in the third quarter was $39 million, or 9 cents a share.
The company noted that the worst of its transformation is behind it, but 2020 revenue is still expected to be down at a high-teen percentage rate compared to 2019. Masks are among Under Armour's best selling products at the moment.
HERE'S A QUICK UNDER ARMOUR CONNECTED FITNESS HISTORY LESSON:
- Under Armour buys MapMyFitness in $150 million wearable computing play
- Will Under Armour's big data, app experiment pay off?
- Under Armour at CES highlights digital transformation efforts as clothing, wearables, apps, data merge
- Under Armour says digital revenue in Q1 nearly tops 2015 tally
- UA HealthBox: Connected fitness in a box from Under Armour and HTC
- Under Armour cites change management woes with SAP implementation as digital transformation stumbles
- Under Armour says 150 million MyFitnessPal accounts hit by data breach