As of today, LA Fitness has 538 clubs, but the company may close a few of the newly acquired clubs from Bally by the end of the year. Photo by Cheri Jones.

Bally Total Fitness has completed the transaction to sell the assets of 171 clubs to LA Fitness, the companies announced today. The deal affects several major markets in the United States.

The completion of the sale comes 12 days after Fitness International LLC, an affiliate of LA Fitness International LLC, Irvine, CA, announced it had agreed to acquire the assets from Bally Total Fitness Holding Corp., Chicago.

Paul Norris, principal, LA Fitness, released the following statement to Club Industry today regarding the acquisition: “Our objective in general is to make this transition as easy as possible for both the members and the employees. We will be servicing all of the membership agreements that we acquired from Bally. The majority of clubs we acquired will remain open, but we will be closing some of the clubs before the end of the year. If we close a facility, we will transfer those members’ agreements to a nearby facility, either an acquired Bally or an LA Fitness. We plan to add new equipment to many of the clubs, and we also have plans to remodel, expand or relocate a number of the clubs to larger and newer facilities.”

Norris added: “After the closing of our asset purchase, the employees at the clubs we purchased will no longer be employed by Bally, but we hope that they will apply for positions with us. We will do our best to find a spot for every qualified Bally employee who wants to be part of our team.”

The price of the sale is $153 million. Bally will maintain about 800,000 members in its 100 remaining clubs, according to Larry Larsen, a spokesperson for Bally. Larsen adds that the company will be debt-free after the closing of the acquisition.

“We will have significant cash on hand from the proceeds of the transaction that will allow us to have the financial flexibility to explore additional opportunities going forward,” Larsen says.

LA Fitness targeted some of the bigger markets in the country in its acquisition, adding approximately 40 clubs in the Los Angeles area as well as 27 clubs in the Chicago area, 13 in the Philadelphia area and 12 clubs each in the Miami and Washington, DC, areas. Those figures are based on an examination of the locations of clubs on Bally’s website before the deal was finalized.

Other metropolitan areas in which Bally clubs will change over to LA Fitness include Detroit (11), Portland, OR (10), Seattle-Tacoma (seven), Atlanta (six), New York (five), Minneapolis-St. Paul (five), Pittsburgh (three), Tampa-St. Petersburg, FL (three), Orlando, FL (two), Phoenix (two) and Dallas (two).

All told, Bally will no longer operate clubs in the following states: Arizona, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Minnesota, Oregon, Pennsylvania and Washington, plus the District of Columbia. The states in which some Bally clubs are transferring to LA Fitness are New Jersey (Deptford, East Brunswick, Echelon, Maple Shade and Union City), New York (Copiague, Lake Grove and Levittown), Texas (Meadow Creek and Red Bird) and Virginia (Falls Church, Landmark, Pentagon Square and Prince William Crossing).

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