The price Equinox paid to acquire The Sports Club Co. was close to $130 million, according to an industry source with knowledge of the deal.
That figure is a little higher than the $125 million the Los Angeles Times reported last week, when Equinox, New York, announced its acquisition of The Sports Club Co., Los Angeles. The deal includes the four The Sports Club/LA clubs in Los Angeles; Beverly Hills, CA; Irvine, CA; and New York City’s Rockefeller Center.
“The past few years have been record-breaking for The Sports Club Co., so this decision was particularly difficult,” The Sports Club Co. said in a statement, “but we are confident that Equinox will guide the clubs into the future and ensure that they continue to be the enduring, some say iconic, institutions that they are.”
The acquisition does not include The Sports Club/LA clubs in Boston, Miami, San Francisco, New York (on the Upper East Side) and Washington DC, nor does it include Reebok Sports Club/NY. All of those clubs will continue to be owned and operated by Millennium Partners Sports Club Management, Boston, which has managed those clubs since 2006. Millennium Partners purchased five of the six clubs from The Sports Club Co. for $80 million.
The Sports Club Co. would not comment on how long the negotiations took place with Equinox but did say it had multiple suitors. The transition of the four The Sports Club Co. clubs to Equinox is expected to take place over the next two to three months.
The three owners of The Sports Club Co.—President Nanette Pattee Francini, Chairman Michael Talla and CEO Rex Licklider—will not be part of the four new Equinox clubs and are looking into activities outside the fitness industry, the company said. Francini and Talla founded the company in 1979.
The Sports Club Co. is No. 22 on this year’s Top 100 Clubs list with a reported $52.9 million in revenue, a 3 percent decrease from its 2009 revenue ($54.5 million) and a 17 percent decrease from its 2008 revenue ($63.5 million). According to figures the company supplied Club Industry, it had 20,107 memberships and 700 employees at the end of 2010.
Last month, The Sports Club Co., a public company traded on the Pink Sheets, reported a 5.4 percent increase in revenue in second quarter 2011 compared to second quarter 2010. The company generated $14.2 million in the quarter compared to $13.5 million in the same period last year. Revenues increased 5 percent to $28 million for the six-month period ending June 30, 2011, compared to $26.7 million for the six months ended June 30, 2010.