Fitness franchise company F45 Training, Austin, Texas, has filed an initial public offering, according to an S-1 filing with the U.S. Securities and Exchange Commission. A date to go public is not specified in the filing, but if the IPO goes through, it will trade as FXLV on the New York Stock Exchange.
Insights into the process may not be as forthcoming as in some other IPOs due to the size of the company. The filing states: “We are an ‘emerging growth company’ and a ‘smaller reporting company’ as defined under the federal securities laws and, as such, may elect to comply with certain reduced disclosure requirements for this prospectus and future filings.”
Actor Mark Wahlberg owns 4.6 percent of the company, partly controls another 46.1 percent through a company called MWIG LLC, serves on the company’s board since investing in 2019 and is a franchisee.
Wahlberg and other pre-IPO shareholders will offer shares to the public, although the filing doesn’t state how many shares they would offer, how many shares outstanding the company will have or the expected price range for the stock. It does state that it will use money raised to repay debt, pay cash bonuses to some employees, fund working capital and take care of other expenses.
In June 2020, Crescent Acquisition Corp. announced it would acquire F45 Training in a deal that would have valued the company at $845 million. The deal would have made F45 a public company since Crescent Acquisition Corp. is a publicly traded special purpose acquisition company. However, the deal was terminated in October.
F45 Training’s 2019 revenue was $93 million, which was a 60 percent revenue growth year over year, but in 2020 with temporary gym closures due to COVID-19, revenue decreased by $10.4 million to $82.3 million.
The company plans to use the proceeds of the public offering to increase its capitalization and financial flexibility, repaying its debts, paying cash bonuses to some employees and executives, pay expenses incurred due to the IPO and use as working capital and general corporate purposes, according to the filing.
The company intends to look at acquisitions as one avenue of growth, the filing states.
F45 Training offers functional 45-minute workouts that combine elements of high-intensity interval, circuit and functional training through a digitally connected global network of studios.
The filing states it sees opportunities in partnering with universities, hospitality operators, corporations and military facilities. In 2016, it opened a studio on the campus of the University of Southern California and now has 29 studios on U.S. college campuses.
The company also sees an opportunity to reach new demographics, the filing states. In 2018, F45 Training launched Prodigy, a training program for children.
Recently, F45 introduced in Australia a new studio model called FS8 that combines yoga, Pilates and toning in a 45-minute, circuit-based workout using a Reformer, mat work, light weights and resistance bands. The company plans to open 50 of these studios this year and as many as 500 in the next few years.
The filing also states it is seeking ancillary revenue growth through sales of products such as footwear, apparel, prepared meal plans, nutrition items, supplements and wearables, such as the LionHeart heart rate monitor that was designed exclusively for F45 Training.
F45 Training was founded in 2013 in Sydney, Australia by CEO and co-founder Adam Gilchrist, expanding by initially selling franchises to members of the original studio and then expanding further by opening nearly 200 studios during the following 30 months. Almost all of F45 Training’s facilities are franchised. In less than eight years, the company had 2,247 total franchises sold in 63 countries, including 1,487 total open studios. Of those studios, 1,286 had re-opened as of March 31, 2021, after temporary closures related to the COVID-19 pandemic.
During the pandemic, 15 F45 Training studios permanently closed and 12 percent of franchises sold but not yet opened canceled their franchisee agreements.
The company’s in-studio experience uses its proprietary technologies: a fitness programming algorithm that leverages a content database of more than 3,900 functional training movements, and a patented technology-enabled delivery platform that allows the company to standardize the F45 Training experience across its global footprint and broadcast content, including workout instructions and timing, directly to its in-studio F45TVs and speaker systems.
The company offered at-home content during the pandemic, but it does not expect to further develop or focus on its at-home offering, according to the filing.
In addition to a relationship with Wahlberg, the company also has relationships with former basketball player Magic Johnson, former soccer player David Beckham and golfer Greg Norman, although the filing doesn’t specify what the relationships are.