Global fitness company F45 Training, supported by actor Mark Wahlberg, made its stock market debut Thursday.
Under the ticker symbol FXLV, trading began on the New York Stock Exchange and rose to $ 17.75 per share on day one, representing a market cap of $ 1.6 billion. The IPO of 20.3 million shares on Wednesday night was in the middle of the expected range at $ 16 per share. The company raised $ 325 million. The stock moved back towards its offering price in afternoon trading, closing 1.25% at $ 16.20 per share.
Before the stock opened, Wahlberg, known for his physique and intense early morning exercise, told CNBC from the NYSE why he liked the company’s approach so much.
“Die-hard fitness enthusiasts who don’t have a schedule, have to do it in the middle of the night or first thing in the morning, don’t want to get on their bikes. That’s fine. But at some point it will stagnate and boring, “said Wahlberg.” You want to be in there with the energy of the people who work with you, are by your side, inspire you, push you and support you. “He added:” The Energy is absolutely amazing. “
F45 Training was founded in Australia in 2013 and offers so-called functional 45-minute studio and home training for people of all fitness levels. It offers new workouts every day, inspired by a database of over 3,900 high-intensity interval training exercises that consist of both cardio and resistance exercises.
The company currently has 1,555 studios and 2,801 franchises in 63 countries and aims to ultimately have more than 23,000 studios worldwide.
“People of any fitness level can come and do the workout, and I’d never seen that before,” Wahlberg said in the Squawk Box. “Someone who is clearly at the beginning of their fitness journey is training with a top athlete and can do the same exercises with modifications, never the same exercise twice. It’s absolutely fantastic. “
Mark Wahlberg, left, and Adam Gilchrist, CEO, F45 Training Holdings on the New York Stock Exchange, July 15, 2021.
Alongside Wahlberg, F45 Training said in its IPO filing that it has promotional relationships with basketball legend Magic Johnson, soccer star David Beckham, standout golfer Greg Norman and supermodel Cindy Crawford.
The company plans to use $ 190.7 million of net proceeds from the IPO to pay back debt, $ 2.5 million towards select cash awards for select employees, and $ 25 million towards the acquisition of the indoor cycling chain Flywheel.
“We will be opportunistic with this capital,” Adam Gilchrist, founder and CEO of F45, told CNBC, who stood alongside Wahlberg. “We’ve been financially conservative since 2013, we’ve never had an unprofitable quarter, and there aren’t many startups that have grown at the rapid pace that can boast of it.”
Gilchrist called the company’s acquisition of Flywheel a “big investment” because he believes the bike chain invested $ 65 million in technology, saving F45 Training about $ 40 million in costs over the three years he would have needed F45 to develop this technology.
F45 Training prides itself on providing a judgment-free zone, Gilchrist said, adding that the company’s studios are considered “sanctuaries” for members with no mirrors and no scales. The program commends people for coming three times a week.
The average F45 workout studio has 175 members, while the company’s breakeven point – when total income equals total expenses – is 75 members, he said. The CEO added that 75% of the company’s members are female and 25% are male, with the general age group being between 25 and 42 years old.
The low membership develops a close community within the studios, he said, where members show up at 6 a.m. and know each other by name.
“We’re a premium product that they pay up to $ 3,000 a year on,” Gilchrist said, adding that the company’s monthly retention rate is in the “low single digits”.
Wahlberg said the company had seen more people visiting the studio in their second months of membership than before the Covid pandemic.
“We’re trying to create communities, and community is even more important to us than the actual training,” said Gilchrist. “We want people to have a third place to go. Obviously they have home, work and F45 is where … it’s a haven where people show up and just have fun 45 minutes a day. “
F45 Training agreed to merge with Crescent Acquisition Corp. in June 2020. zu, a special-purpose acquisition firm, later canceled the deal as the pandemic closed several of its studios.
– Reuters contributed to this report.