LA Fitness, Irvine, CA, is acquiring 171 clubs from Bally Total Fitness, Chicago, for $153 million, the companies announced today. The blockbuster deal will change the landscape of the health club industry.

The acquisition involves Bally clubs in 16 states plus the District of Columbia. The deal is expected to be completed on Nov. 30. After completion of the transaction, Bally will continue to operate its remaining 100 clubs.

The states in which the Bally clubs have been acquired are Arizona, California (Southern California), Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Minnesota, Oregon, Pennsylvania, Washington, the District of Columbia and certain locations in Massachusetts, New Jersey, New York and Virginia.

A source with knowledge of the situation told Club Industry last month that LA Fitness had planned to do due diligence for more than half of Bally’s clubs. Bally reported it had 278 clubs at the end of 2010. LA Fitness had 360 clubs at the end of last year.

For part of this year, Bally had been in talks with Gold’s Gym International, Irving, TX. Officials from both companies met in early August in Chicago. According to a source, among the topics that were discussed were Bally’s club operations, facilities, real estate and finances. Gold’s was to visit about 40 Bally clubs, according to a source. But talks of a possible Gold's acquisition of Bally cooled later.

The LA Fitness acquisition of Bally marks the second big deal in the industry in the past four days. On Tuesday, Life Time Fitness, Chanhassen, MN, announced it had acquired four clubs operated by Lifestyle Family Fitness, St. Petersburg, FL, in Ohio and Indiana and that it could acquire up to another five in North Carolina. Lifestyle also announced it would close at least nine of its clubs in those states, pending the terms of the deal, which will be finalized early next month.

In August, Equinox, New York, announced it was purchasing four The Sports Club/LA clubs from The Sports Club Co., Los Angeles. That deal went for $130 million, according to a source, and was finalized in October.

LA Fitness is ranked No. 2 behind 24 Hour Fitness, San Ramon, CA, on Club Industry’s Top 100 Clubs list this year. LA Fitness had an estimated $1 billion in 2010 revenue. (24 Hour had an estimated $1.352 billion.) Bally is No. 5 on this year’s list, as it reported $550 million in 2010 revenue.

In April, sources said that LA Fitness was close to a deal to acquire Urban Active, Lexington, KY, but the deal fell through at the last minute as Urban Active was met with lawsuits and handled complaints from the Better Business Bureau in the state of Ohio.

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