F45 Training, a global fitness company, was backed by actor Mark Wahlberg and made its stock market debut on Thursday.
It was traded on the New York Stock Exchange under the ticker symbol FXLV. The stock reached $17.75 per shares on its first day, giving it a market cap of $1.6 billion. Wednesday evening’s initial public offering, 20.3 million shares, was priced at $16 per Share. This was in line with the expected range. The company raised $325million. The stock drifted back toward its offering price in afternoon trading, closing up 1.25% at $16.20 per share.
Wahlberg, who is well-known for his physique and intense morning workouts, spoke to CNBC from the NYSE floor about why he likes the company’s approach.
“Die-hard fitness enthusiasts who don’t have the time, can do it in the middle or early morning, but don’t want to get on a bicycle. It’s okay. Wahlberg said that eventually, it becomes boring and static. “You want to be there with the energy of others working out alongside you, inspiring and pushing you, supporting you and pushing you.” He said, “The energy in the room is incredible.”
Founded in 2013 in Australia, F45 Training offers what it calls functional 45-minute studio and home workouts for people across all fitness levels. It has new workouts each day, inspired by a database of over 3,900 high-intensity interval training exercises consisting of both cardio and resistance.
The company currently has 1,555 studios and 2,801 franchises across 63 countries, and aims to ultimately have more than 23,000 studios worldwide.
Wahlberg stated that anyone can join the workout and it is open to all levels of fitness. “An individual who is just starting out in their fitness journey, working out with an elite athlete. It’s a great way to be able to do the exact same exercises, even if they’re modified. It’s incredible.”
Mark Wahlberg (left) and Adam Gilchrist (CEO, F45 Training Holdings on the New York Stock Exchange), July 15, 2021.
F45 Training also stated in its IPO filing that it has promotional partnerships with Magic Johnson, David Beckham, and Cindy Crawford.
The company plans to use $190.7 million of the IPO’s net proceeds to repay debt, $2.5 million to give select cash bonuses for select employees, and $25 million to acquire the Flywheel indoor cycling chain.
Standing next to Wahlberg and F45 founder Adam Gilchrist, CEO of F45, Gilchrist stated that “We’re going be opportunistic using that capital.” “We have been fiscally conservative since 2013, and we have never had an unprofitable quarterly. There aren’t many start ups that have grown at this rapid pace, like F45,” Gilchrist said to CNBC.
Gilchrist described Flywheel’s acquisition as a “great deal” because the company had invested $65million into technology. F45 Training was able to save $40 million on its costs and it took F45 three more years to build that technology.
F45 Training takes pride in providing a judgment-free environment, Gilchrist said. The studios are also considered “sanctuaries” for its members, as they have no mirrors and scales. The program is proud of the three times per week that people come in.
An average F45 Training studio has 175 members while the company’s break-even point — when total revenue equal total expenses — is 75 members, he said. The CEO stated that 75% of F45 Training’s members are female, and 25% are men. The general age range is between 25-42 years old.
He said that the small membership creates a close-knit community within studios. Members show up at 6 a.m. and get to know each other by name.
Gilchrist stated, “We are a premium product and they pay anywhere up $3,000 a YEAR,” adding that the company has a low retention rate in the “low single digits”.
Wahlberg said that people have been visiting the studio more often in the second months of their membership than before the Covid pandemic.
Gilchrist stated that “We’re trying create communities and for us, community is even more important than the actual exercise.” We want people have a third place. They have home, work, F45. But, we want them to have a third place.
F45 Training merged with Crescent Acquisition Corp. as a special purpose acquisition firm in June 2020. However, the deal was later cancelled by the pandemic that shut down several of its studios.
— Reuters contributed to this report.