Categories IPO, Leisure & Entertainment

Life Time Group IPO: Here are a few things to know about this fitness company that will go public next week

The company will offer 46.2 million shares at a price range of $18 to $21

The fitness industry is gradually recovering after being hit hard by the pandemic last year when fitness centers closed down and people started working out at home. Now as restrictions ease and folks slowly return to their routines, these centers are witnessing a rebound. One such player in the industry, Life Time Group Holdings, is set to go public next week. Here are a few things to note about this company:

IPO details

Life Time Group Holdings Inc. is scheduled to go public on Thursday, October 7. The company will begin trading on the NYSE under the ticker symbol LTH. It will offer 46.2 million shares at a price range of $18 to $21. The IPO will be managed by a group of underwriters led by Goldman Sachs and Morgan Stanley.

Company intro

Life Time describes itself as “a leading lifestyle brand offering premium health, fitness and wellness experiences to a community of nearly 1.4 million individual members, who together comprise more than 767,000 memberships as of July 31, 2021.” The company has over 150 centers across 29 states in the US and one province in Canada.

Life Time recorded 92 million visits to its centers in 2019, 48 million visits in 2020 despite the pandemic, and 32 million visits during the first half of 2021. In 2020, 69% of the company’s total revenue came from recurring membership dues while 29% came from in-center revenue. Life Time was founded in 1992 and has 30,000 employees.

Financials

In 2019, before the pandemic, Life Time generated $1.9 billion in revenue and $30 million in net income. In 2020, due to the pandemic, the company recorded revenue of $0.9 billion and delivered a net loss of $360 million. In the first six months of 2021, revenue amounted to $0.6 billion while net loss was $229 million.

In March 2020, Life Time closed all its centers due to the COVID-19 pandemic and the company did not collect monthly access membership dues or recurring product charges from members. It reopened its first center in May 2020. As of August 31, 2021, all of its 155 centers were open.

Since the end of 2019 through August 31, 2021, the company has opened nine new centers. It intends to open six new centers this year, with plans to open 20 or more new centers in 2022 and 2023.

Market opportunity

Life Time sees vast opportunity in the health, fitness and wellness industry. The company estimates that the US wellness economy represents a market opportunity of approx. $900 billion. Life Time believes it will be able to gain traction once the pandemic subsides based on certain trends seen during the pandemic.

According to the Centers for Disease Control and Prevention, US obesity prevalence grew from 30.5% to 42.4% from 2000 to 2018. In February 2021, 42% of US adults experienced weight gain during the pandemic. Life Time believes that people giving higher priority to their health will be a tailwind for the company.

In addition, based on data from the International Health, Racquet and Sportsclub, approx. 22% of total health clubs and fitness studios closed permanently during 2020. This presents Life Time with an opportunity to attract new customers.

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