It’s official: 24 Hour Fitness Worldwide, Inc. has been sold.
“We would like to express our appreciation to our limited partners, who have shown great patience in their support of 24 Hour Fitness and its management through the years, helping lead to this successful outcome,” said Winston Hutchins, the general partner of Forstmann Little & Co., in a press release.
On June 2, 2014, AEA Investors LP and the Ontario Teachers’ Pension bought the company from Forstmann Little, which had acquired 24 Hour Fitness in 2005. Overtime, 24 Fitness has grown to have nearly four million members in over 400 clubs across the U.S.
The terms of the deal were not disclosed, though Dow Jones & Company, Inc. reported Forstmann Little had been seeking $2 billion for the sale. The company had purchased 24 Hour Fitness from founder Mark Mastrov for $1.6 billion in 2005.
“We would like to thank the board of directors and all of the employees of 24 Hour Fitness for all that they have done to bring us to this day,” said Kathleen Broderick, the managing director of Forstmann Little, in the release. “We are confident that this fine company will continue to flourish and grow under the leadership of AEA and Ontario Teachers.”
In February 2013, Elizabeth Blair joined 24 Hour Fitness. Then in September, she became its chief executive officer. However, Blair announced she would not be remaining with the company.
“Elizabeth Blair has done an extraordinary job in leading the company to this very successful conclusion,” said Mark MacDougall of the law firm Akin Gump Strass Haur & Feld, LLP, speaking on behalf of Forstmann Little in the release. “I think that Ted [Forstmann, the founder of Forstmann Little,] would be very pleased with Elizabeth and her executive leadership team over the past 16 months.”
According to 24 Hour Fitness, Mark Smith will join the company as chief executive officer and Frank Napolitano has been named president. Smith will take office in July 2014. Until then, the “Office of the CEO” has been established and will report to 24 Hour Fitness’ board of directors. The “Office of the CEO” is comprised of Frank Napolitano; Danny De La Rosa, the president of clubs; and Patrick Flanagan, chief financial officer.
Forstmann Little had tried to sell 24 Hour Fitness since the death of Ted Forstmann in 2011. Acquiring 24 Hour Fitness was the last significant portfolio company controlled by the firm after his death.
“Today’s sale of 24 Hour Fitness brings to a close the final chapter of Ted Forstmann’s remarkable career as an investor,” said MacDougall in the release.
By Heather Hartmann