Planet Fitness to spend $800 million on an acquisition

Planet Fitness Inc (NYSE: PLNT) jumped more than 5.0% in the stock market this morning after announcing a new acquisition that it said will boost its earnings by more than 10% in 2022.

Transaction to complete in Q2 of 2022

Planet Fitness on Tuesday said it will buy Sunshine Fitness for $800 million in cash and stock. The franchisee operates over 100 of its fitness clubs in the United States.

The deal that is likely to complete before the second quarter of 2022 will help Planet Fitness expand its footprint across more geographies. In the press release, CEO Chris Rondeau said:

According to Planet Fitness, it will fund the agreement via existing cash on hand. It will also issue securitized notes and use the proceeds to complete the transaction.

Who will oversee operations?

The Hampton-headquartered company said Shane McGuiness – the chief executive of Sunshine Fitness, will oversee operations of the combined corporate store portfolio. CEO Rondeau added:

Planet Fitness had 15.2 million members at the end of fiscal 2021 and 2,254 stores after opening 132 new locations during the financial year. Last week, the fitness chain said it was yet to see a significant hit from the Omicron-related concerns.