United Kingdom-based PureGym signed an asset purchase agreement with Blink Fitness, following the New York-based franchise’s Chapter 11 bankruptcy filing in August.
The companies announced September 10 the agreement for PureGym to buy Blink’s corporate operations and “a substantial portion” of Blink’s gyms in New York and New Jersey for $105 million cash.
Blink Fitness, owned by luxury fitness brand Equinox Group, has more than 80 locations nationwide, about 10 percent of which will be closed. Equinox also owns Soul Cycle and other concepts.
The deal, subject to court approval and supervision, makes PureGym a stalking horse bidder in the auction set to occur October 28. PureGym has about 600 gyms in 10 countries.
“We are confident that Blink’s foundation as an affordable fitness brand will provide a strong base for new ownership to build upon,” President and CEO Guy Harkless said in a press release. The company declined to provide additional comments.
PureGym intends to invest more in the budget-focused gym franchise by improving the customer experience.
“We have long admired Blink for the premium and affordable fitness experience that the team has delivered, and their commitment to helping members improve their life through fitness,” PureGym CEO Humphrey Cobbold said in a release.
Blink intends to sell the remaining locations in California, Texas and Illinois.
On August 12, Blink announced its intent to sell and file for relief through Chapter 11 bankruptcy. The U.S. Bankruptcy Court for Delaware approved the relief.
It listed liabilities between $100 million and $500 million, and assets fell in the same range.
Other affordability-focused gym franchises include Planet Fitness, which did $4.5 billion last year, and Crunch Fitness, which did $957 million.
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Throughout Blink’s sale process, it is still paying its employees, vendors and supplies, as well as providing gym services for members, according to the brand.
“We know how important fitness is to those who choose to work out at Blink, and we continue to go the extra mile for all of our members,” Harkless said.
Also pending court approval is a commitment from existing lenders for $21 million in debtor-in-possession financing to support operations, according to Blink.
The company reports a 40 percent increase in revenue over two years.