Forstmann Little & Co (New York) announced the sale completion of 24 Hour Fitness, worldwide company, to a investment group led by Ontario Teacher’s Pension Plan and AEA.
24 Hour Fitness is a leading fitness chain, with 4 million subscribers and around 20 000 employees. They run around 400 clubs in the United States. Ted Forstmann, the founder of Forstmann Little died in November 2011 and 24 Hour Fitness was the last big ownership that his company controlled. Forstman Little bought 24 Hour Fitness back in 2005 and the fitness chain was led by Elizabeth Blair, an ex Yahoo exec that became the CEO in September 2013.
Headquartered in San Ramon, CA, 24 Hour Fitness is a leading health club industry pioneer, serving nearly four million members and employing 21,000 fitness professionals in more than 400 clubs across the United States. The company was acquired in 2005 by Forstmann Little, the private equity firm founded and led by Theodore Forstmann. 24 Hour Fitness is the last significant portfolio company controlled by the firm following the death of Ted Forstmann in November 2011.
During its final year under Forstmann Little’s ownership, 24 Hour Fitness was led by former Yahoo! executive Elizabeth Blair. Ms. Blair joined 24 Hour Fitness in February 2013 and was named Chief Executive Officer in September 2013. Ms. Blair announced that she will not be remaining with the company following today’s sale.
A source told Club Industry that the total debt put on 24 Hour Fitness will be $1.35 billion (including an $850 million term loan and $500 million in bonds). Ontario Teachers and AEA Investors are investing $585 million—30.2 percent—in equity, adds the source. The sale is a 7.75 times EBITDA (earnings before interest, taxes, depreciation and amortization) multiple transaction based on $250 million in EBITDA generated by 24 Hour Fitness.