Australian fitness chain F45 Training will go public in the U.S. after reaching a deal to be acquired by Crescent Acquisition, a special purpose acquisition company backed by investment firm Crescent Capital. F45’s Co-founder and Chief Executive Adam Gilchrist will continue to run the fitness chain.

F45 franchises offer 45-minute fitness classes based on functional high-intensity interval and circuit training. F45 has more than 1,900 outlets around the world, including over 500 in Australia and over 650 in the U.S.

The transaction will accelerate F45’s continued global expansion, driven by its highly attractive and scalable franchise model, technology-enabled platform and optimized studio design. Upon closing of the transaction, which is expected in the third quarter of 2020, the combined company will retain the F45 Training Holdings Inc. name and will trade on the NASDAQ exchange.

“F45’s mission is to improve people’s lives and well-being, and the company was founded to make unique, effective, and high-quality training accessible to everyone while empowering franchisees to run successful businesses,” said Gilchrist in a statement. “As a public company, I am confident that we will be able to accelerate our mission while creating value for our shareholders. We look forward to continuing to disrupt our industry and to inspire even more people to achieve their health and fitness goals through F45’s innovative workouts combined with our nutrition program.”

Commenting on the announcement, Robert Beyer, executive chairman, and Todd Purdy, CEO, both of Crescent Acquisition Corp, said jointly, “We are looking forward to deepening our relationship with Adam and the entire F45 team as they continue to build what is undoubtedly one of the most exciting growth stories in health and fitness. F45’s high-profit margins, exceptional franchisee economics and repeatable business model position it for continued rapid expansion. We are confident that F45’s strong member loyalty and consistently innovative and differentiated workouts will continue to prevail in many new and existing markets around the world.”

Mark Attanasio and Jean-Marc Chapus, Co-Managing Partners of Crescent Capital Group LP, said jointly, “Our goal in forming this acquisition vehicle was to leverage Crescent Capital Group’s 30-year track record as a leading alternative investment platform and extensive deal-sourcing network to identify and acquire a business that would benefit from and perform well in the public markets. We are convinced that Adam and his team have created such an opportunity and believe we can help F45 expand its impressive growth and performance as a public company.”

The combined company will continue to be led by Gilchrist, along with Chief Financial Officer Chris Payne, Chief Operating Officer Heather Christie and its deep and talented management team. Its board of directors will include the current members of the F45 board and Crescent Acquisition Corp’s sponsor will name two individuals to serve as directors. In 2019, Mark Wahlberg and FOD Capital LLC, a family office fund managed by Michael Raymond, led a private equity investment in F45 through MWIG LLC, a private investment vehicle. The MWIG group has been instrumental in accelerating F45’s growth and will retain its board representation after the close of this transaction.

Transaction Summary
Crescent Acquisition Corp has entered into a definitive agreement to acquire F45 with a combination of stock and cash consideration. The combined company is anticipated to have an enterprise value of $845 million and be capitalized by cash from Crescent Acquisition Corp’s trust totaling over $250 million, assuming no public shareholders of Crescent Acquisition Corp exercise their redemption rights, along with an incremental $50 million committed by Crescent Capital Group LP pursuant to a forward purchase agreement to acquire 5 million units of Crescent Acquisition Corp. Existing F45 shareholders are expected to be issued approximately 53.3 million shares in the combined company and paid up to $204 million in cash consideration, assuming no public shareholders of Crescent Acquisition Corp exercise their redemption rights. Current F45 shareholders will hold approximately 60% of the combined company at closing, assuming no redemptions by the public shareholders of Crescent Acquisition Corp. Closing of the transaction is subject to receipt of all requisite regulatory approvals, approvals by Crescent Acquisition Corp’s and F45’s stockholders, and other customary conditions.

Credit Suisse is serving as financial and capital markets advisor, BofA Securities is serving as capital markets advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to Crescent. Goldman Sachs & Co. LLC and J.P. Morgan are serving as financial advisors and Gibson Dunn & Crutcher LLP is serving as legal advisor to F45.

Photo courtesy F45