A booming fitness franchise backed by Hollywood star and entrepreneur Mark Wahlberg is gearing up for an initial public offering, according to a June 21 federal filing, and it's doing so as an Austin-based company.
F45 lists Austin as its current corporate headquarters in the filing, a relatively new designation for the company that was started in California.
It would add another high-profile entrant to Austin's roster of locally headquartered public companies, which has continued to swell since technology giant Oracle Corp. in December formally shifted its HQ to Austin. The pipeline of entrepreneurial talent coming from the Bay Area to Austin continues to be a talking point for industry leaders as more businesses are lured here by the wealth of opportunity and a friendly regulatory environment, among other factors.
The arrival of F45 brings a fitness company that has sold 2,247 franchise agreements across 63 countries, according to the company's June 21 filing with the Securities and Exchange Commission. A message left for F45 President and CEO Adam Gilchrist was not immediately returned.
The initial paperwork filed by F45 Training Holdings Inc. says the company plans to raise $100 million, which is likely a placeholder number that will be updated later in the offering process. It hasn't yet set pricing for its shares. It plans to be listed under "FXLV" on the New York Stock Exchange. Goldman Sachs & Co. LLC is the company's underwriter.
The move follows more than a year of speculation that the company would go public, but conversations of a special acquisition move died out when F45, like other gyms and fitness businesses, had to close down due to the Covid-19 pandemic. F45 now says 86% of its studios have re-opened as vaccinations have increased and Covid cases have fallen in the U.S. The company said its revenue fell from $92.7 million in 2019 to $82.3 million in 2020.
F45 is currently setting up a 44,000-square-foot headquarters at Penn Field in Austin, according to past Austin Business Journal reporting, with a lease that runs through 2029. The growing fitness company was also among the early adopters for Austin-based AnthemIQ, an Austin-based real estate-technology platform that helps tenants find commercial real estate.
In addition to Austin, F45 also has offices in Australia and England. The company reported having 84 U.S. employees at the end of March. It also has 32 employees in Australia and six in the United Kingdom.
Gilchrist co-founded F45 in Australia in 2013. It focuses on one-on-one training and a standardized 45 minute workout, which it fuels with workout content on in-studio displays. The company operates mostly on a franchising model, which is says creates a relatively low initial investment and operating expenses. Its studios require as little as 1,600 square feet of training area.
"We believe this flexibility will enable us to capitalize on our estimated long-term global opportunity of over 23,000 studios," the company said in its filing.
F45 got a big boost in 2019 when Mark Wahlberg and FOD Capital made a minority investment in the company, bringing aboard Wahlberg's celebrity reach, including 16 million Instagram followers. It has also teamed up with basketball Hall of Famer Earvin "Magic" Johnson, soccer legend David Beckham and golfer Greg Norman, according to the company's S-1 filing.
Wahlberg holds nearly 1.4 million shares of the company's stock — or about 4.6% of the company. He's also partially in control of another 46% via MWIG LLC, a special fund led by FOD Capital LLC and Wahlberg. It invested $100 million in F45 Training Holdings in exchange for 10 million shares of convertible preferred stock, according to the filing.
F45 is just one of the actor's many ventures. He's also co-founder of Wahlburgers, Performance Inspired Nutrition and co-owns a car dealership in Ohio. Wahlberg's film production company, Unrealistic Ideas LLC, is behind HBO Max docuseries "Wahl Street," which tells the behind-the-scenes stories of Wahlberg's business life, including the shutdown of F45 during the pandemic and Wahlberg's celebrity promotion obligations.
F45’s promotional agreement with Greg Norman’s ABG-Shark LLC says the golf legend would be entitled to performance-based cash compensation based on the company’s value. He also has a promotional deal with Malibu Crew LLC, a subsidiary of F45, that entitles him to equity compensation equal to 15% of Malibu Crew’s value.
Meanwhile, the fitness company’s deal with DB Ventures Limited, affiliated with soccer star David Beckham, entitles the firm 1% of the company's issued and outstanding common stock or $5 million on the six- and 12-month anniversaries of the company’s debut on public markets.
Magic Johnson has a promotional relationship with F45 that is set to last until 2026.
Austin has welcomed several new public companies to its landscape during the past year. Get the latest list — bigger than ever — below.
