F45 IPO: Everything you need to know about F45 Training shares
Rebecca Cattlin July 12, 2021 10:30 AM
F45 Training is expected to list this week, in a bid to raise over $270 million and value the firm at over $1.45 billion. Learn more about F45 training – including how much actor Mark Wahlberg could earn from the IPO.
What is F45 Training?
F45 Training offers 45-minute fitness 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 across 63 countries.
Is F45 publicly traded?
F45 Training is not currently publicly traded, but if its IPO goes ahead as planned, its shares will begin trading on the New York Stock Exchange under the symbol FXLV.
F45 Training’s IPO update comes after it cancelled a SPAC deal with Crescent Acquisition, in June 2020.
When is the F45 IPO?
The F45 IPO is due to happen on Thursday 15 July 2021, according to Nasdaq.1 The company originally filed its S-1 form in late June, and the revised filing was revealed in early July, but there was still no date for the IPO listed.
What is the value of F45 Training?
The value of F45 Training is likely to be between $1.45 billion and $1.54 billion, according to its revised S-1 form. The company plans to sell 20.3 million shares at between $15 to $17 per share. F45 Training would make about $275.9 million from the listing.
This price range is considered quite optimistic for the industry, especially given F45 is an unprofitable business and has experienced falling revenues due to COVID-19.
How to buy F45 Training Holdings shares
When F45 shares list, you’ll be able to trade them as you would any other listed shares on the stock market. Using derivatives, you’ll also be able to sell the shares, if you thought they were overpriced and will fall.
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How does F45 Training make money?
F45 makes money through the membership fee it charges attendees, which works out at approximately $65 a week. For this, they can train as often as they want. At this rate, each studio franchise earns around $400,000 per annum.
Is F45 Training profitable?
No, as of March 31 2021, F45’s net loss per segment was $36 million so far in 2021. This is a steep increase from its 2020 filing which showed net losses of $25 million.
The company’s revenues decreased to $82.3 million for the year ended December 31, 2020, compared to $92.7 million for the previous year, due to the pandemic causing studio closures.
Discover how to read an earnings report.
Even with Mark Wahlberg’s backing and lockdown restrictions easing, volatility is likely to remain for the young company.
Ultimately, the company’s financial results are affected by the number of franchises sold and studios it opens, and by the operating and financial results of such studios. This means failure to properly assess franchisees and increase revenue in each location could be detrimental to the entire business.
Another risk to the company’s future profitability is that the training industry is highly competitive, and health trends come and go quickly. So, while F45 is a popular business now, this could change as the landscape adapts to new fitness trends.
What is F45’s business strategy?
F45’s basic business strategy is to create a leading global fitness training and lifestyle brand. The company operates using a franchise model, which involves individual franchisees putting in an initial investment to open a studio of approximately $315,000.
These franchises, according to the F45 Franchise Survey in 2019, can produce average EBITDA margins in excess of 30% and average cash-on-cash returns in excess of 33% in their third year. Despite the COVID-19 pandemic closing studios, F45 was able to grow its franchise, which it sees as evidence of the ‘resilience’ of its business model. Eventually, F45 aims to have over 23,000 studios worldwide.
The company is based around a technology-enabled platform that enables it to distribute its workouts worldwide. This algorithm provides access to a database of more than 3,900 new workouts each day, all of which are standardised across the F45 Training global network.
The company is focused on keeping workouts diverse, so that customers are continually offered new content that will keep them engaged and coming back for more.
F45 Training plans to use $190.7 million of its earnings from the IPO to repay debt. It will then use $2.5 million to pay employee bonuses, $25 million to acquire assets of Flywheel indoor cycling chain and $5.6 million to pay expenses incurred in connection with the IPO, according to the filing. Any remaining capital is expected to be put toward working capital and general corporate purposes.
Following the IPO, it’s also likely the company will expand into new channels and explore partnerships with universities, hospitals and military facilities.
Who are the directors of F45?
The executive officers of F45 are:
- Adam Gilchrist – Founder, President, Chief Executive Officer and Chairman of Board
- Chris Payne – Chief Financial Officer and Director
- Luke Armstrong – Chief Revenue Officer
- John Minty – Chief Marketing Officer
- Heather Christie – Chief Operating Officer
- Patrick Grosso – Chief Legal Officer
- Dorian Workman – Chief Technology Officer
- Elliot Capner – Chief Commercial Officer
How much did Mark Wahlberg invest in F45?
In March 2019, a group led by Mark Wahlberg and FOD Capital made a minority investment in F45 Training; details of the investment were not released. But thanks to both the investment, and Wahlberg’s fame, the company received a boost from the deal.
In F45’s IPO filing, the company stated that ‘Wahlberg’s involvement, leveraging his broad celebrity reach (with over 17 million Instagram followers) and well-known affinity for fitness, will continue to be a key differentiator in helping us to continue to drive growth’.
MGIW, which Mark Wahlberg owns 26% of, plans to sell about 1.6 million shares during the upcoming IPO. MGIW would earn $23.3 million from the IPO at the midpoint price of $16 per share.
Other famous affiliates of F45 include Earvin “Magic” Johnson, Jr, David Beckham, Greg Norman, Cindy Crawford and other professional athletes and personalities who promote the company’s products. There is an increasing trend toward celebrity and influencer involvement in the stock market, which can have both positive and negative ramifications for companies.
Learn more about how celebrities are influencing the stock market.
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