Yahoo Finance Low-Cost Gym Chain EoS Seeks Private Capital to Fund Growth
(Bloomberg) -- Bankers from Jefferies Financial Group Inc. have been sounding out investors about a deal to provide fresh capital to low-cost gym operator EoS Fitness Holdings LLC, according to people familiar with the situation.
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The bank has reached out to investors including private credit firms for at least $100 million to help fund its growth strategy, said the people, who asked not to be identified discussing a private matter.
Eos didn’t provide a comment, while a representative with Jefferies declined to comment.
During the marketing effort, bankers have touted the profitability of the chain on a per-location basis, said the people. The gym chain, whose memberships start at $9.99 a month, is seeking to expand after opening five new gyms in four states in the first quarter of the year.
At least some lenders are viewing the liquidity injection as a bridge to a potential public offering in the future, the people said. Dallas-based Eos has locations in Florida, Texas and the Western US.
Fitness centers have increasingly turned to the private markets to shore up their cash reserves as they continue to recover from the Covid-19 pandemic. Luxury fitness company Equinox Holdings secured around $1.8 billion in fresh capital in March to refinance maturing loans and support its growth strategy. The transaction was led by Sixth Street, a new investor in the firm, and Silver Lake. Meanwhile, low-cost gym operator Planet Fitness Inc. recently issued $800 million of bonds backed by most of the company’s assets.
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