Private Equity Firms Considering Buyout of Peloton

Private equity firms have reportedly been considering a buyout of Peloton.

At least one firm has talked with Peloton about going private, and a number of other firms have considered an acquisition but may or may not have talked with the company, CNBC reported Tuesday (May 7), citing unnamed sources.

A deal may not be made, and Peloton may remain a public company, according to the report.

When asked by CNBC about these reports, a Peloton spokesperson said, “We do not comment on speculation or rumors,” per the report.

These discussions come at a time when Peloton’s market capitalization has fallen to $1.3 billion as of Monday (May 6), down from its high of $49.3 billion in January 2021, the CNBC report said.

The company still has a profitable subscription business, but it has struggled with the cost of manufacturing its bikes and treadmills, the high-profile recalls that those products have experienced, and the reduction in big-ticket purchases by consumers of all income groups, per the report.

On Thursday (May 2), Peloton announced the launch of restructuring efforts that include laying off approximately 400 employees — about 15% of its global workforce — and reducing its retail showroom footprint to mitigate costs.

This announcement, coinciding with its Q3 fiscal earnings report, is part of the company’s broader strategy to slash annual run-rate expenses by over $200 million by the end of fiscal year 2025.

“The objective of the cost reductions is to reshape Peloton to align our cost structure with the current size of our business and position Peloton to generate sustained and meaningful positive free cash flow, which is a top priority for us,” Peloton Chief Financial Officer Liz Coddington said May 2 during the company’s quarterly earnings call.

On the same day, the company announced a leadership change that included Barry McCarthy stepping down as Peloton’s CEO, president and board director and Chairperson Karen Boone and Director Chris Bruzzo stepping in to serve as interim co-CEOs.

McCarthy joined Peloton in February 2022, at which time the company was preparing to overhaul its board, slash overhead and lay off 2,800 people.