Xponential Fitness Inc. has filed a form with the U.S. Securities and Exchange Commission for an initial public offering, according to a release on June 28 from Xponential Fitness, Irvine, California.
Xponential owns nine franchised brands, operating in 48 states and 10 countries outside the United States: AKT, Club Pilates, CycleBar, Pure Barre, Row House, Rumble, StretchLab, STRIDE and YogaSix. As of March 2021, it has 1,775 locations and 1,400 franchisees serving 850,000 consumers, according to its filing.
The company filed to trade under the symbol XPOF on the New York Stock Exchange (NYSE). The the S-1 form did not list the date for public trading to begin, the number of shares to be offered or the price range for the proposed offering.
However, Xponential indicated on the form that it will sell shares of its Class A common stock, seeking $100 million through the IPO, but that number was estimated solely for the purpose of calculating the amount of the registration fee, according to the document. The form did not state how many shares it will offer or the price point for those shares. It does state that will anticipates selling $200 million of convertible preferred stock to MSD Partners, which is an affiliate of Dell Technologies founder Michael Dell, who has a net worth of $50.7 billion, which makes him the 30th richest person in the world, according to Forbes.
Revenue from the public offering will go to repay debt.
2020 revenue for Xponential was $106.6 million, a 17.5 percent decrease from 2019. The company had system-wide sales of $560 million and $442 million in 2019 and 2020, respectively, and $160 million and $132 million for the three months ended March 31, 2020 and 2021, respectively. The company generated average quarterly same store sales growth of 7 percent over the nine quarters ended March 31, 2020 and experienced a decline of 14 percent over the nine quarters ended March 31, 2021.
The filing notes that Xponential’s models are designed to generate, on average, and average unit volume of “$500,000 in year two of operations and studio-level operating margins ranging between 25 percent and 30 percent, resulting in an unlevered cash-on-cash return of approximately 40 percent” for franchisees.
As of March 31, 2021, franchisees were contractually committed to open an additional 1,391 studios in North America and an additional 693 studios in nine other countries. The company estimates it could have about 6,900 studios in the United States.
Xponential is headed by Anthony Geisler, who previously owned LA Boxing before selling it to UFC Gyms in late 2012. He then purchased Club Pilates in 2015, building it from 80 franchise territories to 475 before selling it to private equity firm TPG in 2017. Geisler later came back to Club Pilates with Mark Grabowski, who had been a TPG partner, to buy out TPG’s stake in Club Pilates. That was the start of Xponential. Geisler told Club Industry in an interview in 2018 that his plan was for Xponential Fitness to house the best brands in every boutique studio vertical.
Xponential isn’t the only fitness company to plan a public offering.
The Beachbody Company announced plans in February to go public and began trading on the NYSE on June 28. It trades as BODY.
F45 Training filed paperwork on June 21 to do an IPO, planning to trade on the NYSE as FXLV. No date for its IPO has been set yet.