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May 2, 2013

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24 Hour Fitness on the auction block

Hard to believe that my little native suburb holds the headquarters of the largest privately-owned fitness chain in the country.

But in fact, 24 Hour Fitness is an East Bay product, with its headquarters nestled into the large Bishop Ranch office park in my hometown of San Ramon.

The gym chain — now owned by private equity firm Forstmann Little — made headlines last week when sources told the NYT the company was up for sale.

The Times reported the company is expected to fetch around $2 billion in an auction-style sale.

A good sum of money, considering Forstmann Little bought it  back in 2007 from founder Mark Mastrov for $1.6 billion.

Mastrov started 24 Hour Fitness with a single San Leandro gym in 1983. The chain has grown to more than 400 locations nationwide including deals with high-profile athletes and the U.S. Olympic Committee.

This June, 24 Hour Fitness and the USOC opened up a training facility for US Olympians in London.

Mastrov himself hasn’t strayed from the fitness industry despite selling the company five years ago. In 2011, he was put on the board of directors for Netpulse Inc., a company specializing in entertainment systems in gyms.

And that’s actual entertainment equipment; not the entertainment you get from watching some of the loons you see lifting weights at your nearest 24 Hour Fitness location.

The Biz Journal’s Eric Young reports that Forstmann Little has hired bigwig Goldman Sachs to “run the auction process.” Other fitness chains, as well as other private equity firms, are expected to be among the bidders.

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