Forstmann Little, the New York-based private equity firm, has agreed to terms on a sale of 24 Hour Fitness, Club Industry has learned.

Mark Smith, the former chairman of Town Sports International (TSI), New York, and longtime club operator Frank Napolitano are involved in the group that is purchasing San Ramon, CA-based 24 Hour Fitness, according to sources with knowledge of the situation. Napolitano worked with Smith at TSI in the early 2000s.

Smith and Napolitano have partnered with AEA Investors, a New York-based private equity firm, and Ontario Teachers' Pension Plan, Toronto, in the purchasing group, according to the sources.

The closing of the sale is "imminent" and a select number of people at 24 Hour Fitness have been notified of the sale. According to sources, the purchase price range is from $1.825 billion to $1.85 billion, which is more than the $1.6 billion Forstmann Little paid for 24 Hour in 2005. One source told Club Industry the deal will close around May 23.

The Financial Times initially reported April 3 that Forstmann Little had hired bankers in preparation of selling 24 Hour Fitness. Since Club Industry's report was published April 2, The Financial Times has updated its story, reporting that Forstmann Little has agreed to sell 24 Hour Fitness to investors led by AEA and the Ontario Teachers' Pension Plan. The Financial Times also is reporting the sale will be close to $2 billion. 

One source told Club Industry that 24 Hour Fitness founder Mark Mastrov, who sold the company to Forstmann Little, did make an offer for 24 Hour Fitness a couple of months ago. Rumors of Mastrov's interest in buying back 24 Hour Fitness had been circulating in the industry.

Once the deal closes, Smith will serve as CEO, and Napolitano will serve as president of 24 Hour Fitness, according to one of the sources.

Kathleen Broderick, chair of 24 Hour Fitness and a director at Forstmann Little, could not be reached in her New York office. Winston Hutchins, general partner and CFO of Forstmann Little, also was out of the office and could not be reached. A person who answered the phone at Forstmann Little said that neither Broderick nor Hutchins would have likely commented on the speculated sale.

Later, 24 Hour Fitness directed questions about the sale to a public relations representative for Forstmann Little, who told Club Industry the company has no comment.

Calls to Smith and Napolitano have not been returned.

A person in the communications department of the Ontario Teachers' Pension Plan told Club Industry it does not comment on speculation pertaining to impending sales. A person at AEA Investors told Club Industry, "I believe AEA would have no comment."

24 Hour Fitness was No. 2 on Club Industry's Top 100 Clubs list in 2013 with an estimated $1.5 billion in 2012 revenue. The company had been No. 1 on the Top 100 Clubs list for nine consecutive years before LA Fitness, Irvine, CA, took the top spot last year.