After months of speculation about mergers and acquisitions in the health club industry, the first major deal of the year was announced today: Equinox, New York, has purchased the assets of The Sports Club Co., Los Angeles.
The deal includes the four The Sports Club/LA clubs in Los Angeles; Beverly Hills, CA; Orange County, CA; and New York City’s Rockefeller Center. Terms of the deal were not disclosed.
The acquisition does not include The Sports Club/LA clubs in Boston, Miami, San Francisco, New York (on the Upper East Side) and Washington DC, nor does it include Reebok Sports Club/NY. All of those clubs will continue to be owned and operated by Millennium Partners Sports Club Management, Boston, which has owned those clubs since 2006.
With the addition of the four The Sports Club/LA clubs, Equinox will operate 56 clubs in the top eight U.S. markets.
“Equinox is excited to be acquiring these four prestigious clubs to further grow our portfolio of trophy properties in L.A. and New York,” Equinox CEO Harvey Spevak said in a statement. “Since its inception 20 years ago, Equinox has been widely recognized for being an industry innovator and for delivering an unparalleled member experience. We see natural synergies as a result of this planned acquisition and are looking forward to integrating our two companies to better serve our respective members.”
Equinox plans to infuse a multi-million dollar investment in the four new clubs and transition them to the Equinox brand over the next six months.
A spokesperson for Equinox said that Spevak was traveling and could not be reached. Millennium Sports Club Management declined an interview request. A request to speak to officials at The Sports Club Co. has not been returned.
Last year, Equinox, New York, positioned itself for a possible acquisition by increasing its debt facility from $400 million to $425 million.
Equinox was No. 6 on Club Industry’s Top 100 Clubs list in 2010 with an estimated $344 million in revenue. The company did not provide revenue numbers for 2010 and is not on this year’s Top 100 Clubs list.
The Sports Club Co. is No. 22 on this year’s Top 100 Clubs list with a reported $52.9 million in revenue, a 3 percent decrease from its 2009 numbers.
Last month, The Sports Club Co., a public company traded on the Pink Sheets, reported a 5.4 percent increase in revenue in second quarter 2011 compared to second quarter 2010. The company generated $14.2 million in the quarter compared to $13.5 million in the same period last year. Revenues increased 5 percent to $28 million for the six-month period ending June 30, 2011, compared to $26.7 million for the six months ended June 30, 2010.