PureGym Bids $105 Million for Blink Fitness

PureGym is aiming to acquire the bulk of Blink Fitness's assets after the brand's owner, Equinox, placed it under Chapter 11 on August 12 due to $500 million in losses and $100 million in assets.

The basic purchase amount would be $105 million in cash, with potential adjustments for factors like property taxes, deferred rent, and customer credits.

Additionally, PureGym will assume Blink Fitness's liabilities, including agreements, customer credits, and certain employee-related expenses.

Acquiring these franchise businesses would allow PureGym to quickly expand their presence in the U.S. market, where they operate under the name Pure Fitness.

The acquisition will be managed by Pinnacle Holdings US, a PureGym Ltd subsidiary, with Latham & Watkins as legal advisors, PJT Partners as investment bankers, and RCS as real estate advisors. PureGym is backed by investors Leonard Green & Partners and KKR.

PureGym has signed an asset purchase agreement encompassing Blink’s corporate operations, including its New York City headquarters and a major portion of its locations, primarily in New York and New Jersey.

At its peak, Blink Fitness operated about 100 locations across New York, New Jersey, California, Illinois, Massachusetts, and Texas, before reducing to 80 sites under Chapter 11. Currently, 67 locations are still operational following additional closures.

The agreement with PureGym excludes Blink's locations in Texas, Illinois, and California, as Blink seeks to sell these to other buyers, resulting in the division of Blink's portfolio during the Chapter 11 process.

PureGym’s offer is pending court approval, granting them ‘stalking horse bidder’ status before an auction on October 28, which may attract other bids.

PureGym CEO Humphrey Cobbold stated, “We’ve submitted a bid for the significant assets of Blink Fitness and secured ‘stalking horse’ status, demonstrating our dedication and intent.

“Since its inception in 2009, PureGym has achieved market leadership in the UK and Denmark while establishing substantial businesses globally.

We’ve always admired Blink Fitness for their premium yet affordable fitness experience and their commitment to enhancing members’ lives through fitness.

“PureGym is dedicated to ensuring uninterrupted service for Blink’s members in New York and New Jersey by maintaining the high-quality fitness experiences they expect,” Cobbold added.

“Our expansion strategy in the U.S. includes further investments in these gyms to upgrade facilities, aligned with our mission to inspire a healthier world.

“This stalking horse bidder agreement in the court-supervised sale process sets the stage for PureGym’s U.S. expansion, and if successful in the auction, these assets will significantly advance our ambitions in the U.S., where we started operations in 2021.”

Guy Harkless, Blink Fitness President and CEO, commented, “We’re pleased to have reached this agreement with PureGym, marking a crucial step in our sale process.

“As we've worked to revitalize our most popular locations and enhance our member experience, we are encouraged by PureGym's interest and belief in Blink’s mission to democratize fitness.

We are confident that Blink's foundation as an affordable fitness brand will provide a solid platform for a new owner to build upon.”

PureGym boasts two million members across 600 gyms in six countries.

It operates corporate-owned gyms in the UK, Denmark, Switzerland, and the USA, as well as 20 sites in Saudi Arabia and the UAE through a franchise partner under the PureGym Arabia brand.

Founded in the UK in 2009, PureGym continues to grow its global footprint.

Source: healthclubmanagement

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