U.S. Gym Chain seeks to go public – Company hard hit by the 2020 pandemic period and seeks to virtualize its offerings in response.

Life Time IPO could raise $1 billion at valuation of $4.1 billion

 

By   –  Managing Editor, Minneapolis / St. Paul Business Journal
Sep 29, 2021, 12:51pm EDT

Life Time Group Holdings Inc., which is working to return to the public markets after years as a privately held company, plans to raise nearly $1 billion in its new initial public offering, the company disclosed Wednesday.

The Chanhassen-based chain of fitness clubs and coworking centers revealed additional details about its IPO hopes in a new securities filing. Life Time plans to sell 46.2 million shares priced between $18 and $21 each. If successful, the IPO could generate as much as $970.2 million at the upper end of the price range.

Renaissance Capital reported that the deal, at its midpoint price, would value Life Time at about $4.1 billion.

That’s roughly the same valuation as when the company was taken private in a leveraged buyout by CEO Bahram Akradi and private equity firms Leonard Green & Partners, TPG and LNK Partners.

Since then, Life Time grew its revenue from $1.3 billion in 2014 to $1.9 billion in 2019, though that figure nosedived in 2020 due to the Covid-19 pandemic. It also expanded beyond its original fitness focus, adding coworking spaces and residences, and partnering with the likes of mall operator Simon Property Group in a bid to create village-like developments where customers live, work and play.

It also took on plenty of debt, which totaled $2.4 billion in May. Life Time plans to use proceeds from the IPO to pay down some of that debt.

The business took a big blow from pandemic-related shutdowns; revenue fell to $900 million and the company posted a net loss of $360 million. However, Life Time has continued to open clubs and coworking centers — a coworking space in downtown Minneapolis opened this month — and said visits and revenue are on a pace to improve over 2020 levels.