Ropes & Gray advised Planet Fitness, Inc., together with its subsidiaries, in completing its acquisition of Sunshine Fitness Growth Holdings, LLC and a related note offering under its securitization. The deal was announced on February 10.
Sunshine Fitness was the first franchisee in the Planet Fitness system and has been backed by TSG Consumer Partners since 2017. Sunshine Fitness operates 114 locations in Alabama, Florida, Georgia, North Carolina and South Carolina that will be combined into the current Planet Fitness company-owned portfolio, which is predominantly located in the Northeast.
The acquisition was financed by the offering of $900 million in Class A-2 Senior Secured Notes under Planet Fitness’ whole-business securitization. The notes consist of two tranches: the $425 million Class A-2-I Senior Secured Notes, with an anticipated repayment date of five years and a fixed interest rate of 3.251% per annum, payable quarterly, and the $475 million Class A-2-II Senior Secured Notes, with an anticipated repayment date of ten years and a fixed interest rate of 4.008% per annum, payable quarterly. The 2022 Notes also include a revolving financing facility that allows for the issuance of up to $75 million in variable funding notes, which was drawn in full in connection with the closing.
Planet Fitness is one of the largest and fastest-growing franchisors and operators of fitness centers in the United States by number of members and locations. As of December 31, 2021, Planet Fitness had 15.2 million members and 2,254 stores in 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia.
The Ropes & Gray acquisition team was led by mergers & acquisitions partner Tom Fraser (Boston) and included tax partner Lee Allison (New York), employment & benefits partner Renata Ferrari (Boston), IP transactions partner Ed Black (Boston), real estate partner Rich Gordet (Boston), private equity partner Patricia Lynch (Boston), litigation & enforcement counsel Steve Kaye and Deidre Johnson (both of Boston), tax counsel Sara Clevering (Boston), data, privacy & cybersecurity counsel Kevin Angle (Boston).
The Ropes & Gray financing team was led by structured finance partner Patricia Lynch and mergers & acquisitions partner Tom Fraser (both of Boston) and included real estate partner Rich Gordet (Boston), tax partner Lee Allison (New York), business restructuring partner Jim Wilton (Boston), IP transactions partner Ed Black (Boston) and tax counsel Sara Clevering (Boston).
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