Planet Fitness IPO Possibility Increases as Company Confidentially Submits Draft Registration Statement

Planet Fitness may be one step closer to becoming a public company Photo by Jennifer Ray
<p>Planet Fitness may be one step closer to becoming a public company. (Photo by Jennifer Ray.)</p>

Planet Fitness Inc., Newington, New Hampshire, submitted to the Securities and Exchange Commission Tuesday a draft registration statement for a proposed initial public offering, according to a release from the company.  The company confidentially submitted the draft registration statement on Form S-1 with the SEC relating to the proposed initial public offering of its Class A common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to commence after the SEC completes its review process, subject to market and other conditions.

Rumors about a possible IPO by Planet Fitness first surfaced in February with a Reuters report. At that time, a source told Reuters that the company could be valued at $2 billion, including debt. 

Planet Fitness ranked No. 7 on Club Industry's Top 100 Clubs list in 2014 with a reported $211 million in 2013 revenue, a 32 percent increase from 2012. That revenue included company-owned stores and franchisee fees, but not franchisee revenue.

The draft registration statement was submitted confidentially. The SEC website notes this about confidential draft registration statements:

"Section 6(e) provides that any emerging growth company, 'prior to its initial public offering date,' may confidentially submit a draft registration statement for confidential, non-public review.

"In addition, a company that has had Securities Act-registered sales of securities other than common equity securities can qualify to use the confidential submission process as long as it otherwise qualifies as an emerging growth company."

Emerging growth companies often conduct a traditional road show after filing the confidential draft submission. These road shows are defined as "an offer…that contains a presentation regarding an offering by one or more members of the issuer's management…and includes discussion of one or more of the issuer, such management, and the securities being offered."

The SEC also allows a test-the-waters communications in which the company would meet with potential investors. 

Due to a quiet period restriction, Planet Fitness was not able to provide additional details beyond the release, a company spokesperson said. 

In 2011, the company, led then by Mike Grondahl, his brother Marc Grondahl and Chris Rondeau discussed an IPO possibility, but the company put plans on hold at that time while it dealt with a lawsuit involving a franchisee group. The two groups settled in August 2012.

In late 2012, TSG Consumer Partners took part ownership of Planet Fitness, investing an undisclosed sum into the company. The Grondahls and Rondeau retained 25 percent ownership at that time, but in January 2013, Mike Grondahl stepped down as CEO, remaining on the board. Rondeau became CEO. Marc Grondahl served as CFO until July 2013 when Dorvin Lively, former CFO for RadioShack, became CFO of Planet Fitness.

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