Mindbody Inc., which went public two years ago, raised $134 million during its second stock offering that ended May 31, selling just over 5 million shares. That’s more than 10 percent of its 46,017,296 shares outstanding.
According to CEO and co-founder Rick Stollmeyer, that money will help pay for future acquisitions that could expand the company’s platform and fan base, as well as bolster its financial resources amid the company’s rapid growth in recent years.
“We’ve reached a couple of important new milestones this year,” he said, noting the acquisition of San Diego-based Lymber Wellness Inc. earlier this year, and partnership with Google. “Really it’s all about aiming at some of those goals that started out in my garage.”
The publicly traded company announced its offering of 4.4 million shares of Class A common stock May 22 in a filing with the U.S. Securities and Exchange Commission. Financial institutions that were underwriting the sale were also given the opportunity to purchase up to 660,000 additional shares — and they did.
The stock was offered at $27.95 per share until May 31.
The San Luis Obispo-based company makes online management software that helps owners of beauty, health and wellness businesses to seamlessly schedule appointments, process payments or manage staff.
It hasn’t yet targeted specific companies to acquire, Stollmeyer said. But, he added, he’s especially interested in competitors who have footholds in niche markets that are difficult to break into, such as resort and spa scheduling, and technological businesses that could improve the company’s software.
“We see some opportunities there,” he said. “There are a lot of growth opportunities to expand our brand with complementary technology and keep improving into the future.”
Stollmeyer noted that the money will also be used for operating and capital expenses.
“We are significantly larger than when we went public,” he said. “It’s just good sense to have some extra money on hand to support that growth.”
When the company went public in 2015, its run rate (an estimation of how much revenue a company is on track to earning in a year, based on quarterly financial data) had just crossed the $100 million mark; this year, it is well on its way to doubling that to $200 million, he said. (Run rates are only estimates, and actual revenues often tell a different story).
5.06 million Number of shares of Class A common stock that Mindbody sold during its offering in May.
In 2016, revenue was $139 million, up 37 percent from 2015, and its net loss was $23 million, compared with a net loss of $36 million in 2015. Looking ahead, it expects revenue for 2017 to be between $179 million and $182 million, up 29 to 31 percent, and a net loss between $5 million and $8 million.
The company has also added about 300 new employees since 2015, bringing the total number of employees to 1,300. About 75 of those work in the company’s new Santa Maria office, which opened in November.
As Mindbody moves forward, Stollmeyer said he hopes to focus on adding new businesses and customers to its lineup of 60,000 businesses and 356,000 wellness practitioners, namely focusing its efforts in English-speaking countries like the United States, Canada, United Kingdom, New Zealand and Singapore, among others.
“We’ve emerged as a notable consumer brand,” Stollmeyer said. “And Mindbody continues to grow around the world.”
Correction: A previous version of this story gave the incorrect number of shares outstanding. It is 46,017,296. The accompanying chart has also been updated to clarify the nature of the shares held by Mindbody’s top executives.
How much stock do Mindbody’s top executives hold?
Here’s a breakdown of how much stock was beneficially owned by Mindbody’s top three executives as of April 18, 2017, according to the company’s proxy statement filed then with the U.S. Securities and Exchange Commission. This includes options that are exercisable and RSUs that are vesting on or before June 17. Class A stock constitutes one vote per share, while Class B stock is 10 votes per share. As of the latest offering, holders of Class B stock held 60.3 percent of the voting power. It could not be learned exactly how much stock each executive currently holds.
Class A Stock
Class B Stock