HAMPTON, N.H. - Planet Fitness, Inc. (NYSE:PLNT) has announced the pricing of $800 million in senior secured notes, to be issued by its subsidiary, Planet Fitness Master Issuer LLC, in a private securitization deal. The notes are divided into two tranches: $425 million with a five-year term at 5.765% interest, and $375 million with a ten-year term at 6.237% interest, both payable quarterly.
The proceeds from the sale, expected to close on June 12, 2024, will be allocated to repaying existing debt, covering transaction costs and funding reserve accounts related to the securitization facility, and for general corporate purposes, which may include buying back company shares.
Planet Fitness, a leading fitness center franchisor and operator founded in 1992, has grown to approximately 19.6 million members and 2,599 stores globally as of March 31, 2024. The company is recognized for its Judgement Free Zone® ethos in its gyms.
The Class A-2 Notes have not been registered under the Securities Act of 1933 and will not be publicly offered in the United States, relying instead on an exemption from registration requirements.
This financing announcement contains forward-looking statements that are subject to risks and uncertainties, including the closing conditions of the notes sale and the company's ability to meet its future financial obligations. Investors are cautioned not to place undue reliance on these statements, which are valid only as of today.
This news is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy the mentioned securities.
In other recent news, Planet Fitness, a leading fitness center operator, has been in the spotlight due to strategic initiatives and performance. The company has reported a 6.2% increase in same-store sales and an 18% rise in adjusted EBITDA for Q1 2024. Planet Fitness also announced a price increase for its Classic Card membership and the appointment of Colleen Keating as the new CEO. In addition, the company disclosed plans for a refinancing transaction involving the issuance of $600 million in new securitized debt.
Analysts have been actively reviewing the company's performance. RBC Capital Markets and Evercore ISI maintain an 'Outperform' rating for Planet Fitness, with price targets of $77.00 and $100.00 respectively. However, Stifel downgraded the stock from Buy to Hold and reduced the price target to $70. On a more positive note, JPMorgan upgraded the stock from Neutral to Overweight and raised the price target to $78.00.
These are just a few of the recent developments surrounding Planet Fitness. The company continues to navigate its growth and challenges, with strategic moves such as debt refinancing and management changes, aimed at enhancing its market position.
InvestingPro Insights
In the wake of Planet Fitness's recent announcement regarding its senior secured notes issuance, investors may be keen to understand the company's current financial health and market position. According to InvestingPro data, Planet Fitness (NYSE:PLNT) boasts a market capitalization of $5.81 billion, reflecting the market's sizable valuation of the company. The firm's impressive gross profit margin stands at 62.35% for the last twelve months as of Q1 2024, underlining its ability to maintain profitability amidst operational costs.
An InvestingPro Tip highlights the company's liquid assets surpassing its short-term obligations, which is a reassuring sign of financial stability for investors, especially when considering the company's new debt undertakings. Furthermore, analysts have confidence in Planet Fitness's profitability, predicting the company will remain profitable this year.
For investors considering a deeper dive into Planet Fitness's financials and market predictions, InvestingPro offers a wealth of additional tips – currently, there are 9 more tips available, ranging from earnings revisions by analysts to the company's performance over the last decade. These insights could provide valuable context to the company's decision to issue new debt and its potential impact on future performance.
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