The Joint, which franchises 215 cash-based chiropractic clinics in the US, announced terms for its IPO on Wednesday. The Scottsdale, AZ-based company plans to raise $30 million by offering 3.0 million shares at a price range of $9 to $11. At the midpoint of the proposed range, The Joint would command a fully diluted market value of $104 million.
The Joint's 225 franchises are located across 25 states, primarily in California (20%), Texas (19%), Arizona (11%) and Georgia (8%). The company generates revenue from franchise and regional development fees (39% of revenue), continuing royalties (42%) and other sources, including back-end software licenses (19%). The company has granted franchises or sold licenses for an additional 250 clinics in various stages of development.
The company is owned by co-founders Fred Gerretzen, John Leonesio , Steven Colmar, Craig Colmar, Richard Rees and Todd Welker.
Revenue increased 15% to $3 million during the six months ended June 30, 2014 due to higher royalty revenues as more clinics were open, partially offset by lower franchise fee related to fewer new openings. Its gross margin rose 110 bps to 65.6%. EBITDA fell from -$139,000 to -$290,000 because of a sharp increase in employment expenses, stock based compensation and health insurance expenses, partially offset by a decrease in marketing spend.
The Joint, which was founded in 2010 and booked $6 million in sales for the 12 months ended June 30, 2014, plans to list on the NASDAQ under the symbol JYNT. Roth Capital and Feltl and Company are the joint bookrunners on the deal.
