Fitness club operator Town Sports International Holdings Inc., or TSI, has agreed to acquire the studio business of Flywheel Sports Inc., according to a Jan. 6 release.
Financial terms of the transaction were not disclosed.
Flywheel operates 29 indoor cycling facilities across the U.S. TSI said it is expecting to benefit from enhanced revenue potential as a result of the move.
"Through this acquisition, TSI plans to enhance the gym experience, similar to the industry’s aggregators, and offer more variety in content, locations and experience for a lower cost," TSI Chairman and CEO Patrick Walsh said in a statement.
As part of the transaction, Kennedy Lewis Investment Management, Flywheel's current owner, will provide $25 million in financing to TSI through a second-lien loan. It has also agreed to assist TSI in refinancing its existing term loan, with a follow-on commitment of up to $25 million of additional second-lien debt.
TSI and Flywheel have agreed to cross-market each other's products until the acquisition closes. The transaction is expected to conclude in the first quarter of 2020, subject to customary closing conditions.