Gym chain Life Time Fitness is getting bought out by private equity

Private equity firms Leonard Green & Partners and TPG Capital have struck a $US4 billion deal to buy Life Time Fitness, the investors announcedearly Monday.

Shares of Life Time Fitness are up about 5% this morning, eclipsing a brief high the stock hit in 2007.

Life Time Fitness is based in Minnesota and has more than 110 locations nationwide. In recent months, gyms and fitness chains have been swapped between investors at growing valuations.

Other deals in the sector include another private equity investment — SoulCycle, the spinning class run by Leonard Green-backed gym Equinox, which plans an IPO, according to a report. In recent years, eager to stretch cash at a time when regulators are reticent to allow banks to give private equity buyers large amounts of debt, smaller investors have also made plays for yoga chains.

And, last year, San Ramon, California-based gym chain 24 Hour Fitness was sold from Forstmann Little to AEA Investors, Fitness Capital Partners and a Canadian pension fund.

Although ‘club deals,’ in which private equity firms team up to make a transaction, have not been friendly to many investors in recent years, TPG and Leonard Green have done several transactions together, including Petco and J. Crew.

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