Life Time Fitness firms $1.25 billion term B at Libor plus 325 bps

By Sara Rosenberg

New York, June 4 – Life Time Fitness Inc. (LTF Merger Sub Inc.) finalized pricing on its $1.25 billion seven-year covenant-light term loan B at Libor plus 325 basis points, the low end of the revised Libor plus 325 bps to 350 bps talk and down from initial talk of Libor plus 350 bps to 375 bps, according to a market source.

The term loan B still has a 1% Libor floor and an original issue discount of 99.5.

Included in the B loan is 101 soft call protection for six months.

Earlier in syndication, the term loan was upsized from $1.1 billion as Life Time Fitness’ senior notes offering was downsized to $450 million from $600 million.

The company’s $1.5 billion credit facility also includes a $250 million revolver.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Jefferies Finance LLC, BMO Capital Markets Corp., RBC Capital Markets LLC, Macquarie Capital (USA) Inc., Nomura and Mizuho Securities USA Inc. are the bookrunners on the deal.

Proceeds will be used to help fund the buyout of the company by Leonard Green & Partners and TPG for $72.10 per share in cash. The transaction is valued at more than $4 billion.

Other key investors in the buyout include LNK Partners and Life Time Fitness chairman, president and chief executive officer Bahram Akradi, who will remain in his role and has committed to make a rollover investment of $125 million in common stock.

In addition to the credit facility, funds for the transaction will come from a $900 million sale leaseback.

Closing is expected this month, subject to shareholder approval and other customary conditions.

Life Time Fitness is a Chanhassen, Minn.-based operator of sports, professional fitness, family recreation and spa destinations.

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