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Planet Fitness Snags 114 New Clubs, $800M in Sunshine Fitness Deal

Planet Fitness says the acquisition is expected to close in the first quarter.
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Planet Fitness  (PLNT) - Get Planet Fitness, Inc. Class A Report flexed some financial muscle Tuesday as the fitness chain operator said it had agreed to buy Sunshine Fitness Growth Holdings from private equity firm TSG Consumer Partners for $800 million.

Shares of the the Hampton, N.H., company were up 5.1% to $93.11 at last check.

The transaction is expected to close in the first quarter. 

Sunshine Fitness, which operates 114 Planet Fitness clubs in the Southeast, is expected to add to Planet Fitness' adjusted net income per diluted share in the low double-digit percent range in 2022.

Sunshine Fitness was the first franchisee in the Planet Fitness system and has been backed by TSG Consumer Partners since 2017.

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TSG acquired a majority stake in Planet Fitness in 2012. Planet Fitness began trading publicly in August 2015, and TSG exited its investment in Planet Fitness in May 2017. TSG then acquired a majority stake in Sunshine Fitness in December 2017.

Upon the closing of the new deal, Shane McGuiness, co-founder and CEO of Sunshine Fitness, who has been an owner and operator in the Planet Fitness system for nearly 20 years, will oversee operations of the combined corporate store portfolio.

"Following this purchase, we will own more than 200 corporate stores, or approximately 10 percent of our total system," Planet Fitness CEO Chris Rondeau said in a statement, "allowing us to retain our asset-light business model which is an important part of our shareholder value proposition."

Rondeau said during an appearance on CNBC's "Squawk Box" last week that the omicron variant of Covid-19 did not appear to have a major impact on gym attendance.

In November, Planet Fitness posted stronger-than-expected third-quarter results and guidance.

Net income totaled $17.4 million, or 21 cents a share, swinging from a loss of $3.1 million, or 4 cents a share, in the year-earlier period. Many gyms were shuttered in 2020 due to the pandemic.