McLean, Va — Four years ago, Jonathan Adler and a group of investors purchased Sport & Health Clubs for $75 million. Slowly but surely, Adler et. al. have been making good on their investment. Other investors are taking notice, too.
Pittsburgh, PA-based PNC Mezzanine Capital and Wynnewood, PA-based CMS Mezzanine Fund have recently poured $25 million worth of financing into Sport & Health, which has 23 clubs in the Washington, DC, metro area that also includes parts of Virginia and Maryland.
“PNC Mezzanine was one of the potential investors when we bought the company in 2005, and they couldn't get in on the deal,” says Adler, Sport & Health's CEO. “They have been interested in us for several years. We felt we had a lot of opportunity in the market, and we needed to raise some capital, and that's why we called on PNC to invest with us. They're a long-term player that is interested in growing the business. CMS is interested in the same growth pattern.”
At a time when financing has been hard to come by for any business, let alone fitness clubs, Sport & Health is going forward with its expansion. Sport & Health plans to open or acquire three new clubs each year for the next several years, beginning in 2010.
“PNC has watched us on a consistent basis be consistent,” says Mark Fisher, Sport & Health president and COO. “We haven't had a lot of ups and downs, and even with a little bit of a bump in the economy, we've been able to perform. We've continued to achieve our sales numbers.”
Sport & Health Clubs ranked 12th on Club Industry's Fitness Business Pro's Top 100 clubs list this year, reporting $93 million in revenue in 2008.
The financing will enable Sport & Health Clubs to restructure senior debt and allow the company to acquire and construct new clubs in the Washington, DC, area.