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F45 Training (FXLV), the fitness franchise backed by actor Mark Wahlberg, trained when it debuted on Wall Street on July 15. Shares of the Austin, Texas-based company rose as much as 11%, then briefly fell below the offer price. of $ 16 per share, before closing up 1.3% at $ 16.20.
In an interview with Yahoo Finance Live, founder and CEO Adam Gilchrist compared the IPO of F45 to that of another fitness franchise chain, Planet Fitness (PLNT).
“We obviously wanted to be able to replicate the success of Planet Fitness where they were able to bring a lot of credibility and visibility to investors to come into their network.”
Like F45, Planet Fitness also valued its stock at $ 16 each in August 2015. The stock also disappointed investors at the time, closing at issue price during the company’s New York Stock Exchange debut. Almost six years later, Planet Fitness shares are currently trading over 300% above their IPO price.
F45, whose name is a combination of “functional training” and its 45-minute class length, offers workout programs both in the studio and directly to members at home. It was founded in 2013 in Australia and today has 1,555 studios and 2,801 franchises in 63 countries.
Gilchrist said more than 90% of its studios have since reopened after being closed due to the pandemic, and attendance at these studios exceeds pre-Covid levels.
Self-proclaimed fitness fanatic Wahlberg bought a stake in F45 in 2019 through the MWIG investment vehicle, when the company was valued at around $ 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 a member of the board of directors.
“Mark wrote a check for over $ 5 million to buy into the business, which is a sign of confidence,” he said. “I think today was probably one of his major milestones outside of, you know, his acting career, which has been absolutely stellar. And the two of us have always dreamed of being here so it’s been an exciting day and an exciting time to ring the opening bell [at the NYSE]. “
For the first three months of 2021, F45 recorded 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 l last year, according to his documents.
Delayed by pandemic uncertainty
F45’s IPO had two false starts. The coronavirus pandemic delayed initial IPO plans in early 2020, then in June of last year, it struck a deal to go public by merging with the special acquisition company, Crescent Acquisition Corp. That deal, which would have valued the combined company at $ 845 million including debt, collapsed in October.
At the time, Gilchrist said in a statement that “prolonged uncertainty around the pandemic” prevented the deal from being reached.
The company intends to use the proceeds of $ 280 million from the sale of shares to repay debt, pay cash bonuses to certain employees and pay the purchase price of $ 25 million for the acquisition by F45 of the indoor cycling studio Flywheel.
Gilchrist called the Flywheel buyout a “big acquisition” because the cycling chain “spent over $ 65 million on technology,” which Gilchrist said would have taken F45 at least three years and around 40 million dollars to build itself.
Gilchrist said he hopes to make acquisitions “outside of the store’s fitness space with services and products that really complement F45, like protein or supplements.”
Alexis Christoforous is a presenter at Yahoo Finance. Follow her on Twitter @AlexisTVNews.
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