According to U.S. professional sports media outlet Athletic News, America’s largest boutique fitness franchisor Xponential Fitness — that owned 11 boutique fitness brands at its peak —is facing pressure from shareholders and now is exploring a sale.
If successful would mark the industry’s second-largest M&A deal in recent years.
In March, Houston-based Voss Capital — the company’s biggest shareholder, controlling 19.3% of outstanding shares — issued an open letter urging the board to hire independent financial advisors and explore a full sale. Kanen Wealth Management, which owns roughly 4% of Xponential’s shares, followed with its own public demand on April 1.
Xponential Fitness, Inc. has initiated a review of strategic alternatives, including a possible sale, while reporting that three board members have stepped down. The announcement comes after Voss Capital, its largest shareholder, issued an open letter in early March urging the fitness studio operator’s board to explore a sale.
The three board members stepping down are Jair Clarke, Chelsea A. Grayson and Bruce Haase. Nicole Parent Haughey, founder of Halsey Loganberry Growth Advisors, has joined the board as an independent director. She formerly held multiple senior operating roles, including COO of Island Creek Oysters, an aquaculture company, and COO of Mimeo, an online printing and content distribution company.
The company, which owns Club Pilates, YogaSix, Pure Barre, and BFT, has engaged Jefferies LLC as its financial advisor for the strategic review process. Potential alternatives may include “a sale of the company, a merger, or another strategic or financial transaction.”
Rachel Lee and Lily Yang, independent directors on Xponential’s Board, said, “Our Board is firmly focused on maximizing value for shareholders, and we are confident that undertaking a thorough and disciplined review of the opportunities available to the company will determine the best path forward.”
Mike Nuzzo, CEO of Xponential, said, “Xponential has built a differentiated platform with a leading portfolio of boutique fitness brands and an asset-light franchise model. While the Board conducts this process, the Xponential team is continuing to execute our strategy to position our brands for success.”
The letter from Voss Capital, which has a 19.3 percent stake in Xponential, followed disappointing fourth-quarter results from the fitness boutique owner. Xponential posted a quarterly net loss of $45.6 million and a 25.6 percent decline in adjusted EBITDA on flat sales.
Shares of Xponential closed Monday at $6.75 after starting the year at $8.23. Shares reached an all-time high of $33.08 in April 2023. Voss Capital contended in the letter that Club Pilates alone is worth more than the company’s current enterprise value.
Xponential Fitness Stock Price Dynamics
About Xponential Fitness
Xponential Fitness is the largest boutique fitness franchisor in the United States, founded in 2017 and headquartered in California. It offers diverse classes including Pilates, cycling, yoga, barre, rowing, and boxing through the management and operation of multiple fitness brands across various verticals, such as Club Pilates, Pure Barre, and CycleBar. For more information, please visit the Xponential Fitness official website www.xponential.com.
Infomation Source: Athletech News
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