Wall Street’s IPO Market is Taking Shape—Literally

Wall Street has been flooded with a string of healthy IPOs as of late with companies like SoulCycle, Planet Fitness, and the makers of SkinnyPop brand popcorn, Amplify Snack Brand Inc., all queuing up to go public. Planet Fitness and Amplify are both expected to price their IPOs next week.

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“Amplify has the tiger by the tail right now. The packaged goods market can have a lot of traction. And, they see what needs to be done in that market,” says Kathleen Smith, Principal, Renaissance Capital, Manager of IPO-focused ETFs.

The Austin, Texas based company describes itself as “a high growth snack food company focused on developing and marketing products that appeal to consumers’ growing preference for better-for-you, or B.F.Y., snacks.”

SkinnyPop was the fastest growing brand of ready-to-eat popcorn in 2014, increasing its share of the segment by 6.5 percentage points to 12.1%, and accounting for more than 40% of both distribution and sales.

It plans to sell 15 million shares at $14 to $16 a piece and will list on the New York Stock Exchange (ICE) under the ticker symbol “BETR.”

“The healthy theme is not going away especially among millennials. It’s a trend right now and we’re going to see more of them in the foreseeable future,” adds Smith.

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Last month, Fitbit (FIT) and Mindbody, Inc. (MB) both went public. Fitbit, the maker of wearable fitness tracking devices has seen its stock more than double making it one of the largest IPOs this year after raising $732 million. Though Mindbody, the software provider for fitness studios didn’t see similar results. The company’s stock opened at $16.22 per share and was trading around the $9 level as of Friday.

 

Source: Reuterss

Now SoulCycle, the high-end indoor cycling chain, is hoping to raise as much as $100 million dollars. The New York company, which launched in 2006, is one of the pioneers in boutique fitness studios and has generated mega-success over the years. It earned $25.3 million last year, up 42% from 2013, with each of their 38 studios generating about $4 million a year in revenue.

Boutique Fitness studios are also one of the fastest growing sectors in the gym industry, according to the International Health, Racquet, and Sportsclub Association, making up 21 percent of the fitness industry.   

But the good ole gyms are far from dying.  Plant Fitness is planning to raise $202 million in an IPO next week. The company plans to sell over 13 million shares at $14.00-$16.00 a piece. Last year, the cheap $10 dollars a month gym generated $299.1 million in revenue and $39.1 million in net income and has a market cap of $528.5 million.

“We are one of the largest and fastest-growing franchisors and operators of fitness centers in the United States by number of members and locations, with a highly recognized national brand,” the company said in the S.E.C. filing.

The increase in health and fitness deals are a reflection that consumers care about what they eat and how they exercise.

“They’re willing to pay a premium for it, too. People are more interested in health and wellness than anything else. They want to live longer and investors like these companies because they’re consumer driven,” says Smith, who says June was the biggest IPO month that we’ve had in over a decade.

“2014 was a record year for us and even though 2015 started off on a slow start, it will still shape up to be a good year,” says Smith, who added: “The consumer side has been the best performing so far.”

Though Smith says not every company will find success but we can expect the overall health trend to stay for awhile.

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