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Friday, Sep 30, 2022

Dell’s New Workout

The race for fitness companies to break out from the pack and become the next Peloton Interactive (Nasdaq: PTON) is apparent in this week’s edition, which features both VC-backed interactive boxing fitness firm FightCamp and IPO-bound boutique fitness franchisor Xponential Fitness on the front page.

N.Y.-based Peloton’s valuation, now standing at about $36 billion, is up sixfold since the onset of the pandemic; both Costa Mesa’s FightCamp and Irvine-based Xponential’s base of digital and interactive users also rocketed up over that time, officials have told the Business Journal this year.

An increased focus on virtual workouts isn’t the only change to Xponential—the umbrella company for Club Pilates and eight other brands—since early 2020, regulatory filings indicate.

Anthony Geisler—a Business Journal Excellence in Entrepreneurship Award winner in May—now has Michael Dell, one of the world’s richest people, as a backer.

MSD Partners, the family office of Dell, is now part of group expected to buy $200 million of Xponential’s stock in a private placement, IPO documents indicate. MSD is also part of a group that lent the boutique fitness firm $212 million, in a deal struck this April, the IPO filing indicates.

MSD’s had some other home-run investments in Irvine; it was one of the early backers of FivePoint Holdings’ Great Park Neighborhoods development in the city.

While interactive fitness was all the rage during the pandemic, the brick-and-mortar locations of some gym operators continue to see a shakeout as life returns to normal.

In 2019, we reported that World Gym International, one of the country’s better-known chains for bodybuilders and fitness enthusiasts, would relocate its headquarters from Los Angeles to Costa Mesa.

World Gym’s expected new hub near John Wayne Airport was previously used by Club Pilates for its operations, prior to that company moving to Irvine under the Xponential umbrella.

Brokerage marketing materials from Lee & Associates sent out last week indicate that move is no longer in the cards, as World Gym is said to be in default of its lease at the “never occupied” space. A new boutique gym tenant, or a buyer, is being sought for the Pullman Avenue site.

While Xponential plans to go public via a traditional IPO, interest in going public by way of reverse mergers with SPACs continues: Irvine’s WM Technology Inc. (Nasdaq: MAPS), which operates cannabis-focused software firm Weedmaps, has seen its value rise to nearly $2.5 billion since completing its deal with SPAC Silver Spike Acquisition Corp. in mid-June.

See next week’s print edition of the Business Journal to hear more from Weedmaps CEO Chris Beals.

OC’s presence in the SPAC world is increasing. New York’s Ellenoff Grossman & Schole LLP, which is reported to have advised on over 150 SPAC deal since the start of 2020, the most of any law firm, has opened its first West Coast office in Irvine.

Eric Landau has joined EGS as co-chair of its securities litigation department, and Travis Biffar has joined EGS’s securities litigation practice as a partner. Both come from Thomas Whitelaw, where they were partners. Both were also previously with Jones Day.

Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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