Apr 25, 2007 2:29 PM
Bally Sells 16 Canadian Clubs
CHICAGO – Bally Total Fitness announced today that it has agreed to sell its 16 Toronto, Canada, facilities to Extreme Fitness Inc., which is acquiring six of the clubs, and GoodLife Fitness Centres Inc., which is acquiring the remaining 10 clubs.
The properties include nine Sports Clubs of Canada and seven Bally Total Fitness clubs. Terms of the transactions, completion of which are subject to customary closing conditions, including lease negotiations, were not disclosed.
Bally also announced today that it has negotiated the form of limited waiver and forbearance arrangements with advisors representing the Ad Hoc Committee formed by holders of its 10 ½ percent senior notes due in 2011 and its 9 7/8 percent senior subordinated notes due this year. The forbearance agreement under Bally’s senior secured credit facility requires that forbearance arrangements be in place with respect to each series of notes by May 14.
The sale of the 16 Canadian clubs is part of Bally’s strategy to divest non-core assets to focus on the core Bally Total Fitness brand and operations in the United States. Proceeds from the transactions are estimated to be approximately $16.6 million ($19.6 million Canadian) and will be available to support operations.
Extreme Fitness, founded in 1995, already has six fitness clubs in the Greater Toronto area and approximately 45,000 members. The six new clubs will double the number of Extreme Fitness facilities in Greater Toronto and increase memberships by more than 30 percent to approximately 60,000 members.
Extreme Fitness plans to upgrade the newly acquired fitness clubs and add state-of-the-art equipment.
GoodLife Fitness, founded in 1979, has grown into the largest group of fitness clubs in Canada with more than 300,000 members. The company plans to have 151 locations by December.
Bally’s shares, which began the week at 74 cents, rose 69 percent to a high of $1.25 before closing today at $1.07 on the New York Stock Exchange.
Story Missing Your Link?
Is the above story missing a link? Is it missing a link to your company, or your website? If this is the case please e-mail us and we'll add the link as soon as possible. Thank you!
