NEW YORK (TheStreet) -- Shares of Life Time Fitness (LTM) - Get Report were gaining 5.2% to $70.67 with heavy trading volume Monday after the gym operator entered into an agreement to be acquired by private equity firms Leonard Green & Partners and TPG.

The private equity firms will buy Life Time Fitness for $72.10 a share, or more than $2.8 billion, in a deal that will bring the fitness company private. The deal values Life Time Fitness at more than $4 billion, including debt.

The deal is expected to close sometime in the third quarter.

Life Time Fitness CEO Bahram Akradi will keep his position in the company following the acquisition.

"Following a comprehensive review by Life Time's board of directors of strategic alternatives to enhance shareholder value, we are pleased to have reached this agreement, which provides our shareholders with immediate and substantial cash value representing a significant premium to our unaffected share price," Akradi said in a statement.

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About 4.3 million shares of Life Time Fitness were traded by 10:15 a.m. Monday, well above the company's average trading volume of about 317,000 shares a day.

TheStreet Ratings team rates LIFE TIME FITNESS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIFE TIME FITNESS INC (LTM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, solid stock price performance, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, LTM's share price has jumped by 34.88%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LTM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 36.33% is the gross profit margin for LIFE TIME FITNESS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.09% trails the industry average.
  • Net operating cash flow has slightly increased to $71.40 million or 5.53% when compared to the same quarter last year. Despite an increase in cash flow, LIFE TIME FITNESS INC's cash flow growth rate is still lower than the industry average growth rate of 24.37%.
  • You can view the full analysis from the report here: LTM Ratings Report