The chain has completed placement of a $6 million Senior Secured Note that will be used, in part, to redeem maturing debt.
SAN FRANCISCO — A slumping economy and national tragedy aren't slowing down Club One, a fitness company with operations in Northern and Southern California, as well as managed corporate sites in eight states.
As we reported in April, Club One started strong this year with a $24.4 million recapitalization program. Now, working with California Bank & Trust, the chain has successfully completed placement of a $6 million Senior Secured Note and added a Senior Revolving Credit Facility. Proceeds from the Senior Secured Note will be used, in part, to redeem maturing debt. Farella Braun + Martel LLP acted as the company's legal advisor for the transaction. Buchalter, Nemer, Fields & Younger represented California Bank & Trust.
“Club One is delighted to establish a new working relationship with California Bank & Trust,” said Eric Markell, Club One's chief financial officer (CFO) in a press release. “We have been searching for a bank that understands retail and leveraged lending and the key role the right financial institution can play in a rapidly growing business like ours. We are looking forward to capitalizing on the many opportunities we see emerging in the fitness industry, and we believe California Bank & Trust has the talent and capacity to support an aggressive growth plan.”
The same release also quoted John Kinney, Club One's CEO, who stated, “This financing is another step forward toward building a capital structure upon which we will execute our fourfold growth strategy, which is 1) to obtain improved performance from our core commercial club holdings; 2) to grow our professional club management business unit; 3) to execute value purchases of existing operating assets; and 4) to selectively develop new club properties in markets that will help cement our market leader position.
“We will continue to build a dominant network of fitness clubs on the West Coast. In July, we purchased a great club property in La Jolla, and we are actively pursuing acquisitions and selected development opportunities elsewhere in California. Despite a slowdown in the California economy, we see great potential for our company and the fitness industry.”