Next Fitness IPO on hold

After SoulCycle, the indoor cycling studio brand owned by Equinox, filed papers for an IPO in 2015, the process has not gone any further since then. Equinox CEO Harvey Spevak blamed the current development of the global economy, the U.S. economy and the capital markets for the delay. Also other fitness operators such as Basic Fit are said to prepare for a potential going public.

All about cycling at Soulcycle

In 2015, US operator Planet Fitness and UK budget operator The Gym Group already went public. Especially the realized valuation of a 17x EBITDA in the latter transaction motivated other industry players to take an IPO into account. According to media reports one of these is operator Basic-Fit, partially owned by private equity firm 3i Group. The budget chain has more than 300 clubs in the Netherlands, Belgium, France, Luxembourg as well as Spain. 3i invested 110 million euros in Basic-Fit in 2013 in a transaction valued at about EURm 275; the IPO is expected to value chain at about EURbn 1.

Already in July 2015, the cycling focused boutique concept SoulCycle had filed for an IPO at the securities and exchange commission (SEC). Founded in 2006 in New York by Elizabeth Cutler and Julie Rice, the company today operators more than 50 studios in the US solely concentrated on cycling classes. The "signature class" includes approximately 35-40 minutes of riding, a five to eight minute upper-body strength series using hand weights and a three minute cool-down stretch. Equinox, the upscale US gym chain, acquired a majority stake in Soulcylce in 2011.In 2014, Soulcycle realized over 81,000 classes and 2.9 million rides, resulting in total revenue of USDm 112 or an average of 38 USD per ride.

With respect to its growth strategy the company is planning to expand in existing and new U.S. markets, with both urban and suburban locations and grow the number of SoulCycle clubs to at least 250 studios. In addition, management is confident that the SoulCycle brand can be successfully transported also abroad.

According to an interview with Equinox CEO Harvey Spevak at Bloomberg TV Canada the process of going public is in a "kind of in a watch mode right now". And he explains: "We've all seen what's happened with the U.S. stock market. If you look at the history over the last 12 months, the data says there are only two IPOs that are now trading above their offering price."

Source: SoulCycle, Bloomberg
Pictures: SoulCycle

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