Private equity firms consider buying out Peloton as company aims to refinance debt.

From CNBC: 2024-05-07 16:08:06

Private equity firms are considering buying out Peloton as the fitness company aims to refinance its debt after 13 quarters of losses. Talks have been held with potential buyers, with last week’s restructuring plan expected to save $200 million in expenses by 2025. Shares jumped 18% in premarket trading.

Peloton has faced challenges with expensive equipment and high-profile recalls, leading to a significant drop in market capitalization from $49.3 billion to $1.3 billion. The company’s struggles to grow sales and generate profit have attracted private equity firms. Last week, Peloton announced CEO Barry McCarthy’s departure along with staff cuts and restructuring plans.

Debt totaling $1.7 billion and the need to refinance have led Peloton to work with lenders like JPMorgan and Goldman Sachs. Plans to cut expenses and generate free cash flow aim to make the company more attractive to investors. Peloton’s profitability and growth have been hindered by high costs and declining hardware demand.



Read more at CNBC: Private equity firms circle Peloton for potential buyout