Gold’s Gym International, Irving, TX, has acquired all 11 Spectrum Athletic Clubs in San Antonio, the company announced today. Terms of the deal, which is expected to close by the end of the month, were not disclosed.
Spectrum Athletic Clubs, El Segundo, CA, will continue to operate its 12 clubs in Southern California. Spectrum is owned by private equity firm Brentwood Associates, Los Angeles. Gold’s is owned and operated by TRT Holdings, Irving, TX.
Rumors of talks between Gold’s and Spectrum surfaced last summer, but there were no official reports of a possible acquisition until today. Other rumors linked Gold’s and a possible acquisition involving Bally Total Fitness, Chicago, and executives from the two companies met last August. Three months later, Bally announced that LA Fitness, Irvine, CA, had acquired 171 of its clubs.
With the acquisition of the Spectrum clubs, Gold’s will increase the number of clubs it operates in San Antonio from nine to 20.
“We are thrilled to bring these 11 Spectrum Athletic Clubs into the Gold’s Gym family and feel this acquisition was a natural fit,” Jim Snow, president of Gold’s Gym International, said in a statement. “Both of our organizations are built around a strong culture of service and a brand promise of delivering an outstanding fitness experience to our members. With 20 locations to choose from, it will now be more convenient than ever for San Antonio residents to stay in shape and reach their fitness goals.”
All 11 of the Spectrum clubs in San Antonio will rebrand under the Gold’s Gym name. Gold’s will honor all current Spectrum memberships in San Antonio, according to Gold’s, and Spectrum members will gain travel privileges to Gold’s network of 700 gyms in 43 states and 30 countries. For Gold’s members, plans are being developed for a tiered membership option that would allow access to former Spectrum locations, according to the company.
“We’re confident that our members and our employees will be in good hands and will continue to enjoy the high level of service they’ve come to expect from us,” Spectrum CEO Bud Rockhill said in a statement. “We think it’s a great fit and that the transition will be seamless. This deal will allow us to strategically invest in our 12 Spectrum locations in Southern California, a business that we will continue to operate going forward.”
Gold’s has invested more than $20 million in club improvements, new gym development, franchise growth and acquisitions in recent months. Snow says the company will continue to add clubs in San Antonio, which is now the biggest market in the Gold’s corporate portfolio and the second-biggest Gold’s market in the country behind Washington, DC.
“We are very bullish on San Antonio,” Snow says. “It has truly become a fitness-conscious city in recent years, and the demand for health and fitness services has grown rapidly. This acquisition is a testament to our enthusiasm about the city and its potential. We look forward to growing with the San Antonio community for years to come.”
Spectrum was advised on the acquisition by Integrity Square LLC, New York, with legal advice from Burr & Forman LLP.
Neither Spectrum nor Gold’s provided financial information to Club Industry for the magazine’s annual Top 100 Clubs list last year. Spectrum was No. 12 on the 2010 Top 100 Clubs list after producing an estimated $89.2 million in 2009 revenue. It was No. 11 on the 2009 list after reporting $93 million in 2008 revenue.
The Spectrum clubs in San Antonio were originated in 1974 when they were known as Racquetball & Fitness Clubs of San Antonio. In 1999, Brentwood Associates acquired the company, which was renamed Racquetball and Fitness Clubs Inc. (RFC). Later that year, Brentwood acquired the Southern California Spectrum club chain from the Sports Club Co., Los Angeles, for a reported $49 million and merged RFC’s operations under the Spectrum name.
The Sports Club Co. opened its first Spectrum club in February 1987 in Manhattan Beach, CA. At the time, the Sports Club Co. also had The Sports Connections clubs, which were later sold to 24 Hour Fitness, and were building The Sports Club/LA brand. The Sports Club Co. sold six of its Sports Club/LA clubs in 2006 to Millennium Partners, Boston, and last year, the company sold its remaining four clubs to Equinox, New York.
The Equinox acquisition was the first of three highly publicized deals last year as the industry began to show signs of consolidation. The others were the Life Time Fitness acquisition of nine Lifestyle Family Fitness clubs and the aforementioned Bally-LA Fitness deal.