Xponential Files for IPO After Adding Studios During Pandemic

(Bloomberg) -- Xponential Fitness Inc., the franchise owner of boutique fitness brands including Club Pilates and CycleBar, filed for a U.S. initial public offering after delaying its listing plans when the coronavirus pandemic hit last year.

The Irvine, California-based company listed the size of its offering as $100 million, a placeholder that will change when terms are set. In April as it was reviving its plans to go public, Xponential was planning to seek to be valued at about $1.3 billion, Bloomberg News reported at the time.

Xponential, calling itself the largest boutique fitness franchisor, continued to grow through the pandemic, according to its filing Friday. As of March 31, it had 1,765 open studios, 294 more than at the end of 2019. It sold 362 franchise licenses, reaching 3,371 in all, during the same period.

The company’s revenue declined and its losses mounted over the past year. It had a net loss of $4.8 million on revenue of $29 million for the three months ended March 31, compared with a loss of $1.9 million on revenue of $32 million in the first quarter of 2020.

Investors have agreed to a $200 million private placement convertible preferred stock in conjunction with the IPO, according to the filing. Although it didn’t detail the stakes of its shareholders, Xponential said it would qualify as a controlled company after going public.

In March, Xponential said it acquired boutique boxing workout brand Rumble, which counts Justin Bieber, Selena Gomez and David Beckham among prior class attendees. The deal’s value, which wasn’t disclosed in the announcement, was as much as $300 million, the people familiar with the matter said.

During the pandemic, Xponential’s outlets turned to outdoor and digital workouts. The company operates a film studio that produces digital content for its brands, which also include Pure Barre, dance-based cardio workout AKT and treadmill-based Stride. Rumble has its own digital platform, Rumble TV.

The offering is being led by Bank of America Corp., Jefferies Financial Group Inc. and Morgan Stanley. Xponential is seeking for its shares to trade on the New York Stock Exchange under the symbol XPOF.

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