iFIT Health & Fitness to raise $600 mln in IPO. Here’s what you need to know

The technology and healthcare industries have dominated the IPO market in the recent past, but it seems the spotlight is shifting to fitness and wellness. After a few closely-watched market debuts in the first half, a slew of fitness IPOs is lined up for the year.

30.8 Mln Shares

iFIT Health & Fitness Inc. this week revealed plans to raise capital through an initial public offering, so as to take the business to the next level. It will be offering around 30.77 million shares for about $18-21 per share. At the midpoint of the price range, the offering would generate proceeds of around $600 million.

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After obtaining regulatory sanction, the shares will start trading in the Nasdaq Global Select Market under the ticker symbol IFIT. The group of book-runners would be led by Morgan Stanley (NYSE: MS), Bank of America Securities, and Barclays.

Headquartered at Logan in Utah, iFIT is a market leader in connected fitness software and equipment, with a client base that is spread across the globe.  The company, which owns popular brands like NordicTrack and ProFrom, was known as CON Health & Fitness until it was rechristened as iFIT a few months ago, to better represent omnichannel offerings like connected health/fitness software and devices.

At-home Workout

The company’s interactive fitness services, supported by an online workout ecosystem and digital content, witnessed strong adoption during the pandemic due to the shift to at-home fitness routines. After the most recent funding round, the company is valued at $7 billion. Scott Watterson, who co-founded the company, is the current chairman and CEO.

iFIT is estimated to have sold more than 10 million interactive fitness products with a gross merchandise value of $2.8 billion in fiscal 2021. It reported total revenues of $1.75 billion for the year, which is more than double the revenue generated a year ago. However, the company’s net loss widened to $516.7 million from $98.5million in fiscal 2020, hurt mainly by a sharp increase in operating expenses. iFIT’s subscription offering has more than six million subscribers worldwide.

Competition

A few months ago, Xponential Fitness (XPOF) listed its stock pursuant to a $100-million offering, setting the stage for intense IPO activity involving fitness companies. Another fitness firm that went public this year is F45 Training Holdings (FXLV).

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The IPO spree is going to intensify competition, though the fitness market remains largely untapped.  It is estimated that fitness and wellness spend would reach around $6 trillion this year. Peloton Interactive, Inc., (NASDAQ: PTON) iFIT’s main rival, has been operating as a public company since 2019.