TRNR Signs Agreement to Acquire Ergatta for $19.5M

Interactive Strength has signed a definitive agreement to acquire Ergattas. The parties signed a letter of intent on January 9, and have been working on the binding definitive agreement since that time. The company said, "Ergatta is a Brooklyn-based connected fitness company that pioneered game-based fitness content, building a stable and cash-generating subscription business with industry leading monthly net retention of more than 98%. Ergatta is expected to generate revenue of more than $10M 2026, with approximately 70% from recurring subscriptions providing high visibility, and approximately a 30% EBITDA margin. Additionally, Ergatta operates an asset-light business model that generates strong operational cashflow without requiring investment in inventory." Assuming full achievement of the earn-outs, the maximum enterprise value would be $19.5M and, given the upper 2026 EBITDA threshold of approximately $4M, TRNR expects the multiple of EBITDA to be less than 5.0x, before any group synergies. To ensure the valuation multiple is attractive to TRNR, 50% of the maximum enterprise valuation is contingent on the amount of Ergatta's 2026 EBITDA and 5% on 2027 EBITDA. Less than 10% of the transaction value is being funded at closing and TRNR expects to receive more cashflow from Ergatta than the initial cash consideration paid in 2026. TRNR will acquire 100% of Ergatta through a combination of cash, debt, stock and future contingent consideration. TRNR expects a quick, efficient close in Q1 2026, subject to completing customary closing requirements. The consideration is structured as follows: The base transaction value of $8.8M is comprised of $1.8M cash at close, $1.8M debt and $5.3M in equity that is locked up until May 2027. An additional $9.8 million could be earned by Ergatta achieving approximately $4M in 2026 EBITDA, which would be payable in May 2027 as $3.5M in cash and $6.3M in equity. Up to an additional $1M in equity could be earned based on achieving approximately $4.8M in 2027 EBITDA. TRNR expects to receive more cashflow from Ergatta in 2026 than the initial cash consideration paid. The initial cash consideration at closing will be funded through TRNR's existing financing facilities. Ergatta's founders and key management team members have agreed to employment arrangements and are expected to continue leading the business post-acquisition.