Might Your Gym Be Getting A New Owner?
24 Hour Fitness, the largest privately held health-club chain with nearly 4 million members across 18 states, is reportedly on the verge of being sold for $1.8 billion. It would be the latest in a series of mergers and acquisitions over the past couple of years that are reshaping the health and fitness club industry.
Trade publication Club Industry says that the prospective purchasers are an investor group that includes former Town Sports International (TSI) chairman Mark Smith and industry veteran Frank Napolitano, also formerly of TSI. TSI is the largest health club company in the northeastern U.S. with half a million members and operates the New York, Boston, Washington and Philadelphia Sports Clubs.
San Ramon, Calif-based 24 Hour Fitness is now owned by the private equity firm Forstmann Little, which bought the chain in 2005 for $1.6 billion but has been winding up its private equity investment fund. It dropped an attempt to sell the chain 18 months ago when no one matched its then $2 billion asking price.
Last year, 24 Hour Fitness, which has estimated annual sales of $1.5 billion, was replaced after nine years as the industry's No.1 in revenue on Club Industry's annual ranking by Fitness International, operator of the LA Fitness clubs chain and which acquired Chicago-based Bally's clubs in 2011.
The sale of 24 Hour Fitness to Smith and Napolitano, if confirmed, would put an end to industry gossip that founder Mark Mastrov might buy back ownership of the chain he started in 1983 with a single club.