Xponential Fitness is gearing up for an IPO. A holding company of boutique fitness brands—including Pure Barre, Club Pilates, CycleBar, YogaSix, StretchLab Franchise, Row House, Rumble, AKT Franchise, and Stride—Xponential hoped to go public last year, but the pandemic derailed those plans. Now, Bloomberg reported that Xponential is planning a public offering this year that would value the company ~$1.3B. Despite covid shutdowns, Xponential posted $435M in revenue across its portfolio of brands in '20. And last month, Xponential acquired Rumble for a reported $300M. Zooming out As gyms/studios reopen, brick-and-mortar operators are looking to get back on track. And in some cases, that means reviving public offerings or sales. - Equinox Holdings is exploring a SPAC merger to go public. The owner of Equinox health clubs, SoulCycle Inc., Blink Fitness, Precision Run, and Pure Yoga, a deal could value the company north of $9B. - F45 Training has been eyeing a public offering, including entering into an agreement to SPAC with Cresent Acquisition Crop, but pulled the plug last year. Subscribe to Fitt Insider for more on the business of fitness and wellness.
It feels like many of these offline fitness brands are considering IPOs out of desperation. With little PE interest and questionable paths to increased profitability, many are left with two options: Sell or go public. We saw this in the tech space before Covid. No question that revenue will return to this sector, but it will come with increased acquisition costs and thinner margins. I think XPO is smart to be buying up diversity, but this IPO is about paying bills, not scaling growth.
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4yI'm wondering about, what seems to be, their low value based on revenue of 2.9x. Or is it? If gyms do come back and expand their online offerings as well, would you expect this price to be a value?