1H 2022 Health & Wellness M&A Report

The return to some form of normalcy after two years of masks, lockdowns, restrictions, and vaccines is shaking up the Health & Wellness Industry, and it’s happening fast. Maybe nowhere faster than in the fitness subsector, where gyms were hammered during the pandemic as people retreated to their homes, and in the home fitness market, where enthusiasts are rediscovering that they like being with other people at the gym instead of being stuck at home. Following a busy 2021, M&A activity slowed in early 1H22, but there was a lot going on in the world and a lot to digest: a war in Europe, a struggling supply chain, stubborn inflation, and general uncertainly as we adjust away from COVID-era behaviors. As we left 2021 and entered 2022, fitness centers and studios that struggled during the depths of the pandemic appeared to rebound as gyms reported membership growth by 1Q22, though a recent survey shows “cleanliness” is in the top three factors when deciding on a membership. Meanwhile, we are watching for the sticking power of at-home fitness businesses – including virtual classes and digitally connected equipment. Once dominant virtual cycling giant Peloton has ridden into hard times since its pandemic peak. And while people value gyms for their motivational and communal benefits, working at home was pretty convenient (but required a substantial investment). As physical gyms dabble in the home-fitness market, we may be looking at a hybrid future, something that’s neither the pre-pandemic after-work stop at the gym, or the stay-at-home and workout-by-video model…