AEA Investors, Fitness Capital Partners and Ontario Teachers Pension Plan have teamed up to buy 24 Hour Fitness USA Inc. Headquartered in San Ramon, California, 24 Hour Fitness is a health club that boasts 4 million members and 400 gym locations in the U.S.
The company was sold by Forstmann Little & Co., a private equity firm that has been winding down operations since 2011 after the death of its co-founder, M&A veteran Theodore "Ted" Forstmann.
Forstmann was known for taking over companies such Dr Pepper Co. and Gulfstream Aerospace Co., as well as his reported relationships with Hollywood celebrities such as "Top Chef" host Padma Lakshmi and, before her, Princess Diana.
This exit marks the end of the wind-down for the firm. In December, Forstmann Little sold talent agency IMG Worldwide Inc. to Silver Lake Management LLC and William Morris Endeavor Entertainment LLC.
Terms of the 24 Hour Fitness transaction were not disclosed, but reports indicate the price was around $1.85 billion. Forstmann reportedly paid $1.6 billion for the business in 2006.
New York-based AEA Investors manages about $3.6 billion. Fitness Capital is a fund organized by investment banks Dean Bradley Osborne and Global Leisure Partners. Jones Day acted as Fitness Capital's legal adviser.
Other fitness-related acquisitions include LNK Partners purchase of Fitness Connection, a chain of health clubs, in October, and TSG Consumer Partners LLC's investment in Planet Fitness, a gym chain, in January 2013.