24 Hour Fitness seeks hunter horse bidder ahead of Chapter 11

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Tony Ueber, CEO of 24 Hour Fitness (LinkedIn, Getty)

24 Hour Fitness in talks with entities to find horse bidder as supervised court nears bankruptcy.

The mid-tier fitness chain, which operates more than 430 gyms, is seeking the stalking horse bidder before filing for bankruptcy, Bloomberg reported. The possible Chapter 11 filing would reduce the company’s debt and give control to lenders. Investment bankers at Lazard and lawyers at Weil, Gotshal & Manges are advising the gymnasium on the process.

“24 Hour Fitness is productively engaged with its creditors to explore strategic options and ensure the business is well positioned to serve its members nationwide for the long term,” a spokesperson for the organization wrote. gym operator at Bloomberg.

Gyms have been hit hard by the pandemic – the New York Sports Club is also considering filing for bankruptcy, and a market research firm has estimated that the fitness industry could grow from an $85 billion industry to a $45 billion industry this year.

But 24 Hour Fitness’s problems predate widespread stay-at-home orders and social distancing. Last year, it reported a 2% decline in revenue in its unaudited fourth quarter earnings report, and membership fell from 3.5 million to 3.4 million between the second and third quarters. third quarter of last year.

The company was also saddled with $1.3 billion after a 2014 leveraged buyout by AEA Investors and a Canadian pension fund. Talk to restructure this indebtedness failed in March, just as the pandemic took hold. [Bloomberg] —Georgia Kromrei

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