Private equity firms circle Peloton for potential buyout

Core Viewpoint - Peloton Interactive Inc. is exploring a potential buyout by private equity firms as it seeks to refinance its debt and return to growth after 13 consecutive quarters of losses [1][2]. Group 1: Financial Performance and Market Position - Peloton's market capitalization has significantly decreased from $49.3 billion in January 2021 to approximately $1.3 billion as of the latest report [2]. - The company has a profitable subscription business with millions of loyal users, but its hardware sales have declined, and high production costs have negatively impacted its financial health [2][3]. - Peloton's debt stands at about $1.7 billion, with $692.1 million owed on a term loan maturing as early as November 2025 and $991.4 million on 0% convertible senior notes due in February 2026 [4]. Group 2: Restructuring and Cost-Cutting Measures - Peloton announced a restructuring plan aimed at reducing annual run-rate expenses by over $200 million by the end of fiscal 2025 [1]. - The company plans to cut its workforce by 15%, equating to around 400 employees, to align spending with revenue [3]. - Savings from the restructuring will primarily come from layoffs and reductions in marketing, research and development, IT, and software expenses [3]. Group 3: Debt Refinancing Strategy - Peloton is collaborating with lenders, including JPMorgan and Goldman Sachs, on a refinancing strategy to deleverage and extend debt maturities at a reasonable cost [4]. - There is confidence from sources close to the company that Peloton will not face issues in refinancing its debt [5].