Mirror founder Brynn Putnam (L) speaks while the home-workout equipment is demonstrated © Getty Images for TechCrunch

Lululemon, the yogawear specialist, has agreed to pay $500m to buy Mirror, a home-workout equipment company backed by hedge fund manager Steve Cohen.

Mirror, which was founded four years ago by a former professional ballet dancer, sells wall-mounted, internet-connected screens for $1,495 each before tax — plus a $39 monthly membership fee — and has become a popular alternative to the gym among well-heeled consumers.

The acquisition of the New York-based start-up shows that the appetite to do deals persists in some corporate boardrooms, even as concerns grow over a rise in US coronavirus infections.

Both companies have sought to capitalise on lockdown trends. While the closure of retail stores has hurt Lululemon’s bricks and mortar sales, its online business has surged as working from home fuels customer demand for comfortable clothing. Shares of the Vancouver-based company have more than doubled from March lows, giving it a market capitalisation of $38bn.

Housebound consumers unable to get to the gym have turned to services such as Mirror and Peloton, which pioneered internet-connected workout bikes.

Mirror founder Brynn Putnam © Getty Images for TechCrunch

Calvin McDonald, Lululemon’s chief executive, said on Monday that the market for at-home workout services was growing “exponentially”.

“We see the size and potential [in] this space as being very dramatic,” he said. Lululemon planned to sell Mirror’s equipment on its own website and stores, he added.

Mr Cohen joined Mirror’s board last year after his venture company, Point72 Ventures, led a $34m funding round. Brynn Putnam, who started Mirror in 2016, said she pitched Mr Cohen on the investment as he was working out on the treadmill.

The acquisition marks a quick turnround for other venture funds, including Lerer Hippeau and Spark Capital, which invested in the company before it produced its first product. Mirror raised $72m in total from private investors, according to PitchBook data.

Mirror was set to generate more than $100m in revenues this year, Lululemon said. Its service offers classes from boxing to meditation and is used by celebrities including musician Alicia Keys.

Lululemon plans to fund the acquisition through a combination of cash on hand and existing and new lending facilities. The deal is expected to complete within two weeks.

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