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Ventures

Exercising a Great Deal for a Planet Fitness Franchise Owner

02/27/2020 | Corporate

Exercising a Great Deal for a Planet Fitness Franchise Owner
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The deal involved some 165 current Planet Fitness clubs, but Wes Jones didn’t break a sweat.

“It’s a great example of where we were around to help the client from the beginning idea all the way through the ultimate exit,” Wes Jones said.

A veteran Mergers & Acquisitions partner at V&E, Jones represented Austin-based United PF Partners (“United PF”) in their recent sale of their expansive network of Planet Fitness clubs. Jones had been working with United PF’s Larry Meyer and Trey Owens before they even founded their development company and was thrilled to help them successfully sell their business after years of painstaking work.

“It’s a great example of where we were around to help the client from the beginning idea all the way through the ultimate exit,” Jones said.

Both successful Planet Fitness owners in their own right, Meyer and Owens decided to join forces to acquire dozens of facilities. They’d excelled at member retention and believed that combining many clubs under the ownership of one company would yield lucrative efficiencies.

In 2016, they turned to Jones and the team at V&E for help.

“When they first came to us they said, ‘Here’s our plan. We’re going to do this giant roll-up,'” Jones said. “For about the next three or four months, we worked with them as they tried to find debt and equity investors in the plan … and they did.”

Shortly thereafter, Jones and the V&E team closed the initial formation of United PF with the acquisition of Planet Fitness clubs from Meyer, Owens and four other Planet Fitness owners. Eagle Merchant Partners provided equity investment, and debt financing was provided by Goldman Sachs.

In the years that followed, V&E continued representing United PF in a number of add-on acquisitions of additional groups of Planet Fitness clubs, and also advised on a number of business issues ranging from employment to insurance to regulatory challenges.

“Over the next four years, they became largest franchisee of Planet Fitness clubs,” Jones said. “All these franchisees were now united under one umbrella.”

By April 2019, Meyers, Owens and their partners had decided that it was time for an exit. They turned to V&E once more.

While the Virginia-based investment bank Harris Williams ran a process to gather multiple bidders, V&E helped United PF overcome hurdles typical of large franchise sales, such as reaching agreements with the dozens of landlords who rented the properties that were home to the many franchise locations. Jones and the V&E team also helped United PF structure the sale, which included some management rollover of equity into the new buyer, in such a way that would protect the interests of United PF team members.

“I imagine 10 years from now, one thing that I will remember about the deal is how incredibly honest and loyal the United PF management team was to people they considered their partners,” Jones said. “It speaks volumes about their integrity.”

United PF ultimately selected American Securities, a leading U.S. private equity firm, as their buyer, signing an agreement with them in November. The deal closed the following month, to the delight of all involved.

“There are always challenges with a transaction of that size,” Jones said, “but, thanks to the vision of United PF and the hard work of our team and the investment bank, it went about as smoothly as you could have ever hoped.”

    Lawyer

  • J. Wesley Jones View Bio

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