Mindbody announces management changes as company hit by higher loan costs

August 19, 2020

Fitness industry technology platform Mindbody has named its current President Josh McCarter as its new Chief Executive, replacing co-founder Rick Stollmeyer who is transitioning to the role of Executive Chair.

Effective from 1st August, the appointment of McCarter, who joined Mindbody as Chief Strategy Officer following the acquisition of Booker Software in 2018, was approved unanimously by the Board.

Sunil Rajasekar, current Chief Technology Officer, will step into McCarter’s shoes as President in addition to his current responsibilities and Aaron Stead, current Senior Vice President of North America sales will assume the role of Chief Revenue Officer.

Explaining the change, Stollmeyer (pictured below), who will continue to serve on the Board and participate in the company’s strategic planning, advised “Mindbody has been my career and singular passion for more than two decades, and I am most proud of the entrepreneurs we have helped and the jobs we have created.

“It has been an exciting 20 years, but these are still the early innings for Mindbody and the wellness industry. Enormous growth opportunities lie ahead and those are made even more important and compelling by COVID-19 (and) Mindbody is well positioned to expand our leadership in the years ahead.”

Impacted by global closures during the Coronavirus crisis of the clubs, gyms, spas and other facilities that use its cloud-based business management solution, lenders to the business have raised the interest rate on Mindbody’s US$475 million loan.

According to a Securities and Exchange Commission filing, pricing on the secured term loan which is due in February 2025 has rise to 8.5 percentage points over the London interbank offered rate from 7 percentage points previously.

Some of the interest on the loan, about 1.5 percentage points, will be paid with more debt, a so-called payment-in-kind arrangement that can provide relief to borrowers under financial strain by allowing them to skip cash payments. However, such debt has been described as coming with more risk to lenders.

The US$475 million loan helped finance the US$1.9 billion buyout of the company by Vista Equity Partners in February 2019, and was provided by lenders led by Owl Rock Capital.

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