B2Digital Inc (OTCMKTS:BTDG) is an emerging name in the fitness, combat sports, and live sports media markets. Shares have been heating up in recent action as the company posts strong growth in its MMA pay-per-view numbers and continues to execute a roll-up strategy in the fitness facility market.

The key to appreciate with this name is the synergy between these elements.

That synergy is a driving notion that could represent an opportunity for investors because it implies the potential for the company to unlock significant growth ahead as these elements begin to reinforce each other in a growth feedback loop.

Indeed, the whole here may be much greater than the mere sum of its parts.

The Model

For a little background, BTDG has built a solid reputation for what amounts to its role as the “farm league” for professional mixed martial arts fighting. It hosts live events throughout the southern and midwestern US featuring top amateur and professional MMA fights where participants are essentially competing for a chance to move up to the big leagues and gain some UFC exposure.

The company has been active in the space for years, and its recent events are beginning to gain a bigger audience as it expands to OTT programming with new Amazon Fire and Apple TV apps, as well as a bigger marketing and distribution footprint for live-streamed PPV access.

But this is all effectively a branding platform that really pays off on the gym side. It’s a bit like Xerox, a company that has made a fortune in its ink division despite being known for selling high-quality printers – the printer business was never the money-maker. The printers just went at cost to make a market for its high-margin ink business.

With BTDG, the showy live PPV events are highly visible brand-building exercises so it can rake in stable, high-margin membership fees at its expanding chain of fitness/training facilities.

At this point, according to company projections, it is on pace to drive topline growth well into the triple-digit percentage ranks. And the bottom line is benefitting from the process as well, which should begin to show up before long. The acquisitions coming in the door are happening at distressed pricing (due to the pandemic), and the branding step is driving higher margins and expanding memberships at each location, creating a very positive ROI profile.

The Power of Branding

To make this argument clear, B2Digital Inc (OTCMKTS:BTDG) is rolling up bargain deals in the fitness facility space, acquiring one gym after another, and rebranding these facilities as nodes in its emerging MMA-focused “B2 Training Facilities Network” – a chain of branded gyms that act as feeder systems for its MMA business. But the gyms themselves are the bread-and-butter for shareholders.

This strong model continues to expand as well. This week, the company announced another acquisition, acquiring all of the assets of Hillcrest Fitness, a fitness facility located in Tuscaloosa, Alabama.

According to the release, the location is set to become the fourth One More Gym location owned and operated by B2Digital as a health club, fitness facility, and Official B2 Training Facility linked to the Company’s B2 Fighting Series and B2 Grappling Series combat sports brands. The Company will add Jiu-Jitsu, Boxing, and MMA instruction areas to the new location to integrate the facility into its B2 Training Facilities Network.

“This is a perfect location for expanding our One More Gym brand because we already have had and will continue to have B2 Fighting Series Fights in the area and our brand is already very well established in this region, which should immediately drive business to our new fitness facility and MMA training center,” commented Greg P. Bell, Chairman & CEO of B2Digital. “We continue to project 1-2 gym acquisitions per quarter, which will drive a significant aspect of our long-term topline performance assumptions. As the B2 Fighting Series brand continues to gain traction as an up-and-coming brand name in the MMA space, our One More Gym business will benefit from its unique association with the B2 Training Facilities Network.”

The company’s current pace suggests it may make 6-8 gym acquisitions this year. Given its performance with new fitness facilities, and its growing brand visibility, one might anticipate that pace of acquisition to accelerate in 2022, helping to fuel a continuing growth boom for the company that could stretch out for years to come.

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