Planet Fitness IPO: Investors Can Pump Up Their Portfolio

Planet Fitness IPO: Investors Can Pump Up Their Portfolio

• Planet Fitness filed with the SEC for its iPO; while number of shares and exact proceeds are unknown, we’d like to highlight the following strengths for potential investors.
• Heavy-hitting syndicate of JP Morgan, Merrill Lynch, Jefferies, Credit Suisse, Guggenheim, Baird, William Blair, Piper Jaffray and Cohen.
• Positive system-wide same store growth in each of the past 33 quarters; 2014 net income was $37.3 million, up from $25.8 million in 2013.
• An exciting health and wellness IPO space, following FIT, GPRO, and MB.

Planet Fitness has declared its intention to become a publicly traded company by filing an S-1 form with the Securities and Exchange Commission. Planet Fitness (Pending:PLNT) will list on the New York Stock Exchange. It is anticipated that the company will go public in about two months.

About Planet Fitness

(www.planetfitness.com/)

Founded in 1992, Planet Fitness is a low-cost gym that caters to the average fitness consumer, rather than to the hard-core workout enthusiast. They pride themselves on offering a high quality and non-intimidating workout environment. With its ‘Judgment Free Zone’, Planet Fitness has widespread appeal even to those who don’t consider themselves to be at an ideal weight or in top-notch fitness. The low-cost membership fee and low-stress environment business model is easily replicated, making it enticing to franchisors. There are currently 919 franchised and 57 corporate-owned stores, with signed agreements for more than 1,000 additional franchisee locations.

Underwriting

Underwriters for the IPO offering are JP Morgan, Merrill Lynch, Jefferies, Credit Suisse, Guggenheim, Baird, William Blair, Piper Jaffray and Cohen.

Management Highlights

Founders Michal and Marc Grondahl brought current CEO Chris Rondeau on board in 1993; one year after Planet Fitness was launched. Rondeau has been instrumental in developing and helping to refine the current business model. He became Chief Operating Officer in 2003 and has served as CEO since January 2013. Chief Financial Officer Dorvin Lively has 30 years of corporate finance experience with companies such as Radio Shack and Ace Hardware. Co-founder Marc Grondahl brings extensive company experience to his position on the Board of Directors.

Risk Factors and Competitive Strengths

Risk factors include dependence on results of Planet Fitness franchises and ability to implement its growth strategy; the need to attract and retain members in a highly competitive industry; and substantial indebtedness of Planet Fitness Holdings, LLC. This debt totaled $506.4 million, including capital leases, as of March 31, 2015.