Target: The Alaska Club
Price: Undisclosed
Sponsor: Lincolnshire Management
Seller: The Alaska Club
Financial Adviser: Seller: The Mercanti Group
The New York-based buyout firm last month closed its acquisition of The Alaska Club, paying an undisclosed sum for 17 gyms. Ares Capital Corp. led the debt financing, arranging a $72 million senior credit facility consisting of a revolver and term loans.
Kate Lehman, a principal with Lincolnshire, said the firm had been looking for a deal in Alaska, believing the state’s relative isolation and growing population would provide both a natural barrier to entry and a source of organic growth for any deal. This particular company proved appealing, she said, because the fitness industry is generally performing well among retailers.
The Alaska Club’s facilities range in size from 5,000 square feet to 17,000 square feet, and the larger gyms have basketball courts, indoor pools and other amenities that cater to entire families, especially during the long, cold winters. “It’s Alaska, so you can’t do much outside,” Lehman said. To spur growth, the Alaska Club will likely expand some of its smaller gyms to include more of these indoor activities, she added.
The transaction came to Lincolnshire from sell-side adviser The Mercanti Group, which pitched the company to one of Lincolnshire’s legion of deal sourcers. The one complication for the buyer was that The Alaska Club counted more than 200 individuals as owners, making it difficult to keep the deal confidential as it unfolded, Lehman said.—J.H.