Forstmann Little, the private-equity firm that owns 24 Hour Fitness, San Ramon, CA, received an extension of its fund, according to 24 Hour Fitness President and CEO Carl Liebert.
The firm had faced a June 30 deadline in which it was required to sell its assets, including 24 Hour. In an exclusive interview with Club Industry, Liebert says the deadline has been extended for at least a year and possibly longer.
“The fund got extended,” Liebert says. “We didn’t have a gun to our head (to sell the company). We really never had a gun to our head in the process. Right now, there’s not a lot of pressure to sell the business, which is good for us. The stewards at Forstmann Little that I work with and my outside board of directors are always going to evaluate opportunities and alternatives in order to get the return. My job is to make sure we run the business every day. We’re having a fabulous 2012. We work hard not to get distracted with rumors or hearsay in the marketplace.”
Liebert adds the company is not putting out financial books at this time, which is customary for a company that is looking to sell. Forstmann Little could still sell the company at any time between now and the time of the new deadline.
“We do know that at some point in time Forstmann Little will want to sell us, but we want to make sure we have a great company for them to sell and to put on the market and for their shareholders and my shareholders to do very well,” Liebert says. “It’s a good position to be in.”
A request to Fortstmann Little seeking comment about the deadline extension was not immediately returned.
For the ninth consecutive year, 24 Hour is No. 1 on Club Industry’s Top 100 Clubs list. The company produced an estimated $1.5 billion in revenue in 2011. (The company did report that it produced “more than $1 billion” last year.) Liebert would not confirm the estimated figure, but he did say that 24 Hour has had 10 straight quarters of comparable club growth.
“It’s great to be on top,” Liebert says. “When I got here (in 2006), I inherited a great brand from Mark Mastrov. What we work toward at 24 Hour Fitness is to change people’s lives and to help people succeed in their fitness goals. Just because you’re on top doesn’t give you the automatic button that says you don’t have to keep getting better every day. [This year] is a fantastic year so far for us. We’re very excited about what we’re seeing and what’s going on, and certainly being at the top of the Club Industry list is a great honor.”
24 Hour recently promoted several executives within the company, and the company’s board added the president’s title to Liebert’s leadership role, a decision for which he says he is “humbled and honored.”
“It’s really terrific to develop people,” Liebert says. “We’ve brought in some really great people, and we’ve seen them grow over time. We’ve had seven district manager promotions this year in 2012, and all seven were club managers for us. They weren’t outside hires. It’s really great when you’re growing talent, and you’re seeing talent have an opportunity to go be successful.”
Liebert and several executives have been attending exhibition games for USA Basketball, which has a partnership with 24 Hour. Many company executives, including Liebert, are heading to London for the Summer Olympics, which begin next week. 24 Hour is the official fitness center sponsor of the U.S. Olympic Team.