Today, Planet Fitness, Inc. announced it entered into a definitive agreement to acquire Sunshine Fitness Growth Holdings, LLC, an owner and operator of 114 Planet Fitness clubs in the Southeast, in a cash and stock transaction valued at $800 million. The cash portion will be funded with new secured notes and cash on hand (details not yet disclosed). The acquisition and debt financing is expected to result in lower total debt to EBITDA on a pro-forma basis, based on the historical and anticipated financial results of Sunshine Fitness locations, and be accretive to the Company’s bottom-line in 2022.
The transaction is expected to close in 1Q22. Following the purchase, the Company will own over 200 corporate locations or about 10% of all Planet Fitness clubs. In connection with the deal and new debt offering, the Company also expects to refinance its 2018 Class-A-2-I Notes ($558 million outstanding as of September 30, 2021).
Commenting on the deal, CEO Chris Rondeau noted, “We are excited to announce the acquisition of Sunshine Fitness, one of our best-performing franchisees in the system, with locations that will provide geographic diversity to our current corporate store portfolio and that are in markets with a long runway for future store development. Owning corporate stores is an important part of our strategy, as it gives us both relevancy and credibility when making decisions that impact the entire system. Additionally, joining our corporate team is a management team that has built some of the highest store-level profit generating locations in our system which will enhance our corporate store leadership and capabilities.”
As of FYE21, the Company had 15.2 million members, which was within 98% of its pre-pandemic high, as it added 1.7 million members over the past twelve months. Heading into 2022, the Company had 2,254 locations, after opening 132 new clubs during 2021. Overall, the Company bounced back quicker than expected from the pandemic, and exceeded member and unit growth expectations during 2021.
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