06 Oct 2022
F45 receives unsolicited US$385m takeover bid
BY Frances Marcellin
F45 Training has confirmed it received an “unsolicited preliminary non-binding proposal” from Kennedy Lewis Investment Management (KLIM) to acquire the company. The deal would see KLIM purchase all outstanding shares of common stock, at a price per share equal to US$4. KLIM already owns 14.57 per cent of the business for a total value of US$35m after buying 3.5m shares in September 2022.
According to a filing with the Securities and Exchange Commission (SEC) in Washington, the deal relates to 96,218,524 shares (outstanding as of September 14 2022) and therefore equates to a US$384,874,096 takeover offer.
The filing reveals that KLIM believes that “as a private company” F45 would “be in a stronger position to maximise its resources and realise strategic value that enhances its operations and supports its stakeholders”.
KLIM was co-founded by Darren Richman in 2017 – along with David Chene – and has been on F45’s board of directors since October 2020.
The company faced turmoil this summer as it cut 50 per cent of its central workforce and saw former president and CEO Adam Gilchrist step down with a reported US$7m payoff. Since then Ben Coates – who joined F45’s board in 2021 – has been serving as interim CEO while recruitment for a new leader takes place.
F45’s shares have been falling since its US$1.4bn IPO in New York in July 2021, with the share price having dropped from around US$17 a share in August 2021 to US$4.09 earlier in July 2022. Following the restructuring announcement they dropped a further 60 per cent to US$1.35, making F45 a likely takeover target and wiping more than US$206m off the company’s value.
F45 said it had been struggling to carry its 'selling, general and administrative' expenses (SG&A). CFO Chris Payne said at the time: “We're taking the necessary steps to right-size our business in light of shifting macroeconomic and business conditions.“
F45 Training has stated that there is “no certainty that any transaction will be consummated” and confirmed that it will not comment further until the board of directors, which includes Mark Whalberg, Chris Payne and co-founder Adam Gilchrist, has completed a full review.
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