IPO Report: MINDBODY (MB)

Francis Gaskins |

MINDBODY IPO, MINDBODY IPO price, MINDBODY IPO date, IPOs this week, stocks to buy now, small-cap stocksMINDBODY (MB) is the leading online wellness services marketplace with over 42,000 local business subscribers on its platform in 124 countries and territories employing over 250,000 practitioners who provide a variety of wellness services to over 24 million active consumers. The company based in San Luis Obispo, CA.

Six other companies are scheduled to IPO for the week of June 15. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Morgan Stanley, Credit Suisse, UBS Securities

Co-managers: Pacific Crest Securities, JMP Securities

End of lockup (180 days): Wednesday, December 16, 2015

End of 25-day quiet period: Tuesday, July 14, 2015

MB scheduled a $100 million IPO with a market capitalization of $448 million at a price range midpoint of $14 for Friday, June 19, 2015 on Nasdaq.

MINDBODY (MB) IPO Summary

MB is the leading online wellness services marketplace with over 42,000 local business subscribers on its platform in 124 countries and territories employing over 250,000 practitioners who provide a variety of wellness services to over 24 million active consumers.

MB’s integrated cloud-based business management software and payments platform for the wellness services industry helps its subscribers simplify the way they run their businesses, attract and engage more consumers, boost their revenues and focus more on what they love to do – improving people’s lives.

MINDBODY (MB) Valuation

Glossary

Accumulated deficit (mm)

.

.

-$134

     

Per share dilution

.

.

-$10.99

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

MINDBODY (MB)

$546

6.1

-25.8

4.3

4.7

18%

annualizing Q1 results

         

MINDBODY (MB) IPO Conclusion

Neutral plus

$8.5 billion market, 17% compound growth rate

Q1 '15 vs Q1 '14

. Rev +42%

. Gross profit growth rate +48%

Gross profit itself is 61%

Q1 Loss was -$8mm, -35% of rev

P/E of -26 reflects modest cash burn rate relative to market cap

Rate of new subscriber addition may be slowing down.

MINDBODY (MB) Business

MB is the leading online wellness services marketplace with over 42,000 local business subscribers on its platform in 124 countries and territories employing over 250,000 practitioners who provide a variety of wellness services to over 24 million active consumers.

MB’s integrated cloud-based business management software and payments platform for the wellness services industry helps its subscribers simplify the way they run their businesses, attract and engage more consumers, boost their revenues and focus more on what they love to do – improving people’s lives.

Moreover, MB helps consumers more easily evaluate, engage and transact with these subscribers, enabling them to live healthier and happier lives. MB is also a leading payments platform dedicated to the wellness services industry.

MINDBODY (MB) Payments Platform

In the 12 months ended March 31, 2015, $6.3 billion in transactions occurred between consumers and subscribers within MB’s marketplace, of which $4.3 billion flowed through its payments platform.

MB’s platform is specifically designed for the wellness services industry. Wellness encompasses multiple dimensions of a person’s well-being – physical, emotional, social, occupational and spiritual, among others.

As a result, MB includes health and fitness, integrative health, salon and spa, fine arts and children’s activities as categories within the wellness services industry.

$8.5 Billion Market, 17% Compound Growth Rate

According to a report that MB commissioned from Frost and Sullivan, MB’s addressable market is approximately 4.2 million wellness businesses worldwide.

Based on their analysis, Frost and Sullivan estimates a $9.5 billion market for business management software solutions targeted at wellness businesses in 2015 and expects this market to grow to $15.3 billion in 2018, which implies a 17.1% compound annual growth rate, or CAGR.

With over 42,000 local business subscribers, MB estimates its current market penetration to be less than 1%.

MINDBODY (MB) Intellectual Property

MB has also developed a patent program and a strategy to identify, apply for, and secure patents for innovative aspects of its platform and technology. MB has 11 U.S. patent applications pending. MB also has five pending patent applications in jurisdiction

s outside of the United States. MB intends to pursue additional patent protection to the extent MB believes it would be beneficial and cost-effective.

MB actively pursues registration of its trademarks, logos, service marks, and domain names in the United States and in other key jurisdictions. MB is the registered holder of a variety of U.S. and international domain names that include the term MINDBODY and similar variations. MB uses several trademarks for its products and services, including “MINDBODY,” “Connect,” “Connect Workplace” and several logos and images, such as the Enso logo, as well as the slogan “Love Your Business.”

MINDBODY (MB) Competition

MB believes its competitors fall into the following primary categories:

On-premise software providers and small cloud-based providers that typically focus on a specific vertical like salon or spa and not the full breadth of wellness services; and

Cloud-based software providers that offer generic scheduling and point-of sale capabilities like Intuit and payments providers with basic scheduling tools like Square.

MINDBODY (MB) 5% Shareholders Pre-IPO

Richard L. Stollmeyer    10.5%

Robert Murphy 7.0%

Jeremy Levine 20.3%

Entities affiliated with Bessemer Venture Partners           20.3%

Entities affiliated with Catalyst Investors             15.5%

Institutional Venture Partners XIII, L.P.    10.0%

W Capital Partners III, L.P.         8.9%

Entities affiliated with J.P. Morgan         10.1%  

MINDBODY (MB) Dividends

No dividends are planned.

MINDBODY (MB) Use of Proceeds

MB expects to receive $89 million from its IPO and use it for the following:

for general corporate purposes, including working capital, operating expenses and capital expenditures. Additionally, MB may use a portion of the net proceeds to acquire businesses, products, services or technologies. However, MB does not have agreements or commitments for any material acquisitions at this time.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
MB MINDBODY Inc. 20.70 -0.25 -1.19 158,769

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