Ex-Mindbody executive defends controversial sale: Investors did ‘very, very well’ | Opinion

A friend and neighbor approached me at a party recently and said, “I read about Rick Stollmeyer in the SLO Tribune last week.”

I took pause. The Tribune had just published an article reporting on a court decision about the events leading up to the sale of Mindbody to Vista Equity Partners in 2019. I knew immediately that the SLO community deserved to know the truth about that transaction from an impartial insider, someone who had a front-row seat to the sale process. That person had to be me.

I served as Mindbody’s chief financial officer and chief operating officer from 2013 to 2021 and was a major participant in both the IPO and the sale to Vista. During those 8+ years, I worked alongside Rick Stollmeyer, Mindbody’s co-founder and CEO.

A little background about Rick is in order.

He is a graduate of the United States Naval Academy, a retired U.S. naval officer and has been part of the SLO community for over 20 years, active in community organizations by donating his time and passion to issues that matter.

Rick co-founded Mindbody and during his two decades as CEO, employed thousands of people in SLO County, generating millions of dollars in wages and rent that go to local stores, schools and landlords.

Rick has always been especially generous and charitable to causes that have significant importance and meaning to SLO. He has donated millions of dollars of his own money to organizations such as French Hospital, where he founded the Stollmeyer Family Birthing Center, which provides advanced neonatal care for the tiniest of patients and includes an acute care nursery to stabilize babies born near term.

Additionally, he established and personally funded the Stollmeyer Cal Poly Scholars program, which provides financial assistance to underprivileged students for whom a Cal Poly education would be unattainable without financial support. In recognition of his significant accomplishments as an innovative and dynamic leader, the Board of Trustees of the California State University and California Polytechnic State University, San Luis Obispo, conferred upon Rick the honorary degree of Doctor of Science. I could write at length about Rick’s generous investments of personal time and money in our community, but that’s not my primary objective here.

And now to the sale of Mindbody in February 2019.

The reality and “so what” of that transaction is that Rick delivered a great outcome for shareholders — period.

Mindbody had been suffering from declining quarterly organic revenue growth for several years. Public markets are unforgiving and should the company’s revenue growth rate have continued to decline (as was anticipated), the stock price would have suffered in an outsized manner.

Pre-IPO investors did very, very well in the sale. Investors who bought stock in the IPO at $14 per share earned a total return of 161% on the $36.50 sale, or an annualized return of over 26% — also a very nice return.

Independent Wall Street analysts universally praised the outcome, once calling the Dec. 24, 2018, announcement an “early Christmas present” for shareholders. And the sale has only looked better in hindsight: The following year, Mindbody’s business was negatively impacted by COVID-19, and who knows what would have happened if the company had remained publicly traded.

The sale was a truly great outcome for Mindbody shareholders at the time and to this day.

The April 6 SLO Tribune article reported that a court made a ruling that Rick “greased the wheels” for Vista to acquire Mindbody for his own personal interest, which he supposedly placed above the interest of other shareholders.

I can personally attest that Rick did nothing wrong in that sale and that he worked in good faith to achieve the highest prices for all shareholders. I was present throughout the sale process and participated in every meaningful discussion with potential buyers. I never observed Rick favoring any buyer; while he was excited about, Vista given their potential to be the highest bidder, he was excited about many others.

But despite reaching out to over 50 potential buyers (and having developed interest from many of them in Mindbody over many years), there was no higher offer on the horizon. There was no self-dealing, and collectively we got the best price to be had. I was a significant shareholder too. If I had thought for a minute that this process was not getting the maximum price for all shareholders, I would not have been supportive.

In reality, the sale of Mindbody to Vista was carefully managed by our highly experienced Board of Directors, investment bankers and attorneys. All of us involved worked diligently to produce the best possible outcome for Mindbody’s shareholders, team members, customers and community. Ultimately, the board unanimously voted for the sale and more than 90% of stockholders voted to affirm it.

Rick is a man of honor and integrity. After working with him for eight years, I can attest without qualification that I have never observed him placing his personal interests above those who have placed their trust in him.

Rick Stollmeyer does not have a self-serving bone in his body, and particularly since he’s done so much for our community, I believe it’s important for the citizens of San Luis Obispo to recognize that.

Brett White is the former chief financial officer and chief operating officer of Mindbody.