We be jammin' mon...<g> May 03, 2005 08:34 AM US Eastern Timezone Forstmann Little to Acquire 24 Hour Fitness Worldwide, Inc NEW YORK & SAN RAMON, Calif.--(BUSINESS WIRE)--May 3, 2005--24 Hour Fitness Worldwide, Inc, the world's largest fitness center company, and Forstmann Little & Co., a New York private investment firm, today announced they have signed a definitive agreement for Forstmann Little funds to acquire the company. The total value of the transaction is approximately $1.6 billion. 24 Hour Fitness is a rapidly growing fitness center company with revenues of more than $1.1 billion, over 3 million members and 330 clubs in 16 U.S. states, as well as 15 clubs in Asia in four countries. Founded in 1983 by Mark S. Mastrov, 24 Hour Fitness has leading market positions in California and other Central and Western states. "24 Hour Fitness has a very strong market position, a superb management team and significant potential for growth, all characteristics we look for in an acquisition," said Ted Forstmann, Forstmann Little senior partner. "We believe our unique capital structure can accelerate the growth of 24 Hour Fitness' very impressive business model. In an industry that has rapidly expanded from $6 billion in the mid-1990's to over $14 billion today, Mark has created a global brand and achieved tremendous growth. We look forward to helping him and his team keep growing the business by further penetrating existing markets and expanding into new ones." Mastrov, Chairman and CEO who will continue to lead the company with his existing management team, said, "This is an exciting day for the 24 Hour Fitness Worldwide team. Forstmann Little has been a valuable partner for many companies, and they share our vision for future growth. With Forstmann Little's strategic guidance and their advantageous capital structure, we are now ideally positioned to capitalize on the significant growth trends we see ahead in the fitness industry." Mastrov will retain a significant stake in the business. Forstmann Little will finance the transaction with more than $900 million from its equity and subordinated debt funds with the balance through a senior loan facility. This conservative capital structure will provide 24 Hour Fitness the capital to fund internal growth and expansion in domestic and Asian markets. The transaction, which is expected to close in June, is subject to regulatory approval. It is not subject to financing. Merrill Lynch acted as financial advisor to 24 Hour Fitness. JP Morgan acted as financial advisor to Forstmann Little. JPMorgan and Merrill Lynch are also providing senior loan financing. Wilson Sonsini Goodrich & Rosati acted as legal counsel for 24 Hour Fitness and Kirkland and Ellis LLP acted as legal counsel for Forstmann Little. About 24 Hour Fitness Headquartered in San Ramon, Calif., 24 Hour Fitness, an innovative leader in the health and fitness industry, serves more than 3 million members in 345 clubs across 16 different states and four countries in Asia. Founded in 1983 as a one-club operation by Chairman and CEO Mark S. Mastrov, 24 Hour Fitness pioneered the concept of making fitness accessible, affordable and a way of life for everyone. 24 Hour Fitness is currently in construction on 22 new sites with an additional 25-30 planned before the end of the year. Supporting the communities it serves, 24 Hour Fitness sponsors many charitable events and organizations including the 2004 - 2008 U.S. Olympic Teams, American Cancer Society and the Magic Johnson, Andre Agassi and Lance Armstrong Foundations. About Forstmann Little & Co. Since 1978, Forstmann Little has made 30 acquisitions and significant equity investments, returning billions of dollars to its investors. The firm's best-known investments include Gulfstream Aerospace, General Instrument, Ziff-Davis Publishing, Dr. Pepper, Community Health Systems, Citadel Broadcasting, and IMG Worldwide. The firm currently holds substantial ownership interests in IMG Worldwide, the world's premier sports and lifestyle management and marketing firm; Citadel Broadcasting (NYSE:CDL), a leading radio broadcaster in mid-sized markets; and McLeodUSA (Nasdaq: MCLD), an independent competitive telecommunications services provider. Prior to the 24 Hour Fitness acquisition, the firm had approximately $1.3 billion in committed capital for future investments.
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