F45 Training (FXLV), the fitness franchise backed by actor Mark Wahlberg, got a workout in its Wall Street debut on July 15. Shares of the Austin, Texas-based company rose a staggering 11%, then briefly fell below the bid price of $16 a share, before rising 1.3% to $16.20.
In an interview with Yahoo Finance Live, founder and CEO Adam Gilchrist compared F45’s IPO to that of another franchise fitness chain, Planet Fitness (PLNT).
“We clearly wanted to be able to replicate the success of Planet Fitness where they could provide investors with a lot of credibility and visibility to get into their network.”
Like F45, Planet Fitness shares are also priced at $16 each in August 2015. The stock also impressed investors at the time, closing at the issue price in the company’s debut on the New York Stock Exchange. Nearly six years later, Planet Fitness stock is currently trading at more than 300% above their IPO price.
F45, whose name is a combination of “functional training” and the 45-minute duration of its classes, offers training programs both in studios and directly to members at home. It was founded in 2013 in Australia and now has 1,555 studios and 2,801 franchises in 63 countries.
Gilchrist said more than 90% of his studios have since reopened after being closed due to the pandemic, and the number of visitors to those studios is exceeding pre-Covid levels.
Wahlberg, a self-confessed fitness buff, bought a stake in F45 through the investment vehicle MWIG in 2019, when the company was valued at approximately $450 million. The IPO gave F45 a market value of $1.46 billion, giving Wahlberg a return of at least 200% on his money.
In addition to being an investor in F45, Gilchrist called Wahlberg “an incredible partner,” who is also a franchisee and board member.
“Mark wrote a check for over $5 million to buy into the company, which is a sign of confidence,” he said. “I think today was probably one of his major milestones outside, you know, of his acting career, which was absolutely fantastic. And the two of us have always dreamed of being here, so it was an exciting day and an exciting moment to ring the opening bell [at the NYSE].”
For the first three months of 2021, F45 had a net loss of $37 million on revenue of $18 million, compared to a loss of $733,000 on revenue of $25 million in the same period last year, according to the filings.
Delayed by the pandemic uncertainty
The F45 IPO had two false starts. The coronavirus pandemic delayed initial plans to go public in early 2020, and in June last year it struck a deal to go public by merging with special acquisition company Crescent Acquisition Corp. That agreement, which would have valued the combined company at $845 million, including debt, fell apart in October.
At the time, Gilchrist said in a statement that the “prolonged uncertainty surrounding the pandemic” hindered the deal.
The company plans to use the $280 million in proceeds from the stock sale to pay off debt, pay cash bonuses to certain employees and pay the $25 million purchase price for F45’s purchase of the Flywheel indoor cycling. studio.
Gilchrist called the Flywheel buyout a “great acquisition” because the bicycle chain has “spent more than $65 million on technology,” something Gilchrist said would take the F45 at least three years and about $40 million to build itself.
Gilchrist said he hopes to make acquisitions “beyond the boutique gym with services and products that really complement F45, such as protein or supplements.”
Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.
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