Planet Fitness Acquires Sunshine Fitness
The $800 million deal will have Planet Fitness acquiring 114 locations
Planet Fitness, one of the biggest fitness franchisors that helped ring in the new year in Times Square, has announced a deal to acquire Sunshine Fitness Growth Holdings, LLC. The cash and stock transaction, valued at $800 million, is slated to close in the first quarter of this year. Shane McGuiness, co-founder and CEO of Sunshine Fitness, will oversee operations of the combined corporate store portfolio. McGuiness brings nearly 20 years experience as an owner and operator within Planet Fitness.
Sunshine Fitness has been backed by TSG Consumer partners since 2017 and was the first franchisee in the Planet Fitness orbit, operating 114 locations in Alabama, Florida, Georgia, North Carolina, and South Carolina. Those locations will be folded into the Planet Fitness portfolio, which is mostly based in the Northeast.
“We are excited to announce the acquisition of Sunshine Fitness, one of our best-performing franchisees in the system, with locations that will provide geographic diversity to our current corporate store portfolio and that are in markets with a long runway for future store development,” said Chris Rondeau, Chief Executive Officer of Planet Fitness. “Owning corporate stores is an important part of our strategy, as it gives us both relevancy and credibility when making decisions that impact the entire system. Additionally, joining our corporate team is a management team that has built some of the highest store-level profit generating locations in our system which will enhance our corporate store leadership and capabilities.”
“Following this purchase, we will own more than 200 corporate stores, or approximately 10 percent of our total system, allowing us to retain our asset-light business model which is an important part of our shareholder value proposition,” Rondeau continued.
“Partnering with TSG has been an incredible experience. Their support for our business and growth never wavered and it has led to this next exciting moment in our evolution as an organization,” said Shane McGuiness, CEO of Sunshine Fitness. “We look forward to joining the Planet Fitness corporate team and being a part of the brand’s next chapter, working with Chris and the broader team to drive continued success in the company-owned stores.”
“My partner, Pierre LeComte, and I have a deep understanding of, and respect for, Planet Fitness and its management team through our long investment and ownership history in both Planet Fitness and, subsequently, Sunshine Fitness. We are pleased that through this transaction we will once again be a shareholder in Planet Fitness and believe it is well positioned to take advantage of the significant opportunities for growth in the years ahead,” Michael Layman, Managing Director at TSG, says. TSG has held a majority stake in Sunshine Fitness since 2017 and Planet Fitness since 2012.
Despite pandemic-related challenges, Planet Fitness ended fiscal year 2021 with 15.2 million members, an increase of 1.7 million members over the past 12 months. The fitness franchise opened 132 new stores and 2,254 stores worldwide. While some gyms are struggling in the face of rising Omicron cases, Planet Fitness reports that 98% of its facilities are open, including 100% of its U.S. locations.
“We exceeded our expectations for both member and new store growth in 2021. The silver lining of the pandemic is that it opened people’s eyes to the importance of fitness and overall health, and we’re seeing members who are visiting our stores are visiting more frequently than in the past, demonstrating their commitment to improving their health,” said Rondeau. “There is tremendous long-term untapped opportunity for our brand to get people off the couch, which is why, as a leader in the fitness industry, we are making this strategic investment for the future.”
Shares of Planet Fitness (NYSE: PLNT) soared late last year after the fitness operator shared strong third-quarter earnings and a report that membership had revealed to pre-pandemic numbers.
The global fitness franchise announced last fall that it launched an initiative to become more inclusive and said Planet Fitness would be offering accessible equipment in its facilities. Planet Fitness worked with the Paralyzed Veterans of America, National Council on Independent Living, and American Council of the Blind, in order to help serve its gym members.
