PureGym is making a bid for the majority of the assets of Blink Fitness, which was put into Chapter 11 by owner, Equinox, on 12 August with losses of US$500 million and assets worth US$100 million.

The base purchase price would be US$105 million in cash, with “adjustments for items such as property tax, deferred rent, and customer credits”. PureGym says it would also assume the liabilities of Blink Fitness, including those under assumed agreements, customer credits and some employee-related costs.

Acquiring the portfolio of franchised businesses would enable PureGym to fast-track its growth in the US market where it trades as Pure Fitness.

The deal will be handled through Pinnacle Holdings US, a subsidiary of PureGym Ltd by Latham & Watkins as legal advisors, PJT Partners as investment banker, and RCS as real estate advisor. PureGym's investors include Leonard Green & Partners and KKR.

The company says it has entered into an asset purchase agreement which covers Blink’s corporate operations, including its head office in New York City and a substantial portion of its locations, with a focus on New York and New Jersey.

Blink Fitness had around 100 locations throughout New York, New Jersey, California, Illinois, Massachusetts and Texas at its peak before it went into Chapter 11 with 80 sites. It currently has 67 locations trading following a further round of closures.

Blink's Texas, Illinois, and California locations are not included in the PureGym agreement, with Blink actively exploring the sale of these locations to other parties, meaning the Blink portfolio will be broken up as part of the Chapter 11 process.

The PureGym agreement is subject to court approval and gives PureGym ‘stalking horse bidder’ status ahead of an auction on 28 October which may include other bids.

The deal remains subject to the approval of the courts.

 Humphrey Cobbold, CEO of PureGym said: “We’ve submitted a bid for a substantial portion of the assets of Blink Fitness and are pleased to have secured ‘stalking horse’ status signifying our commitment and intent.

“Since it was founded in 2009 PureGym has built market leadership in the UK and Denmark and established material businesses in other global markets. We’ve long admired Blink Fitness for the premium and affordable fitness experience the team has delivered and their commitment to helping members improve their life through fitness.

 “PureGym is committed to ensuring continuity of service for Blink’s members in New York and New Jersey by maintaining the high-quality fitness experience members have come to expect,” said Cobbold, “As part of our strategic expansion into the US market, PureGym plans to invest further in these gyms to enhance the customer experience through facility upgrades that align with our mission to inspire a healthier world.

 “This agreement to be the stalking horse bidder in the court-supervised sale process lays the foundation for PureGym to expand its footprint in the US and – should we be successful in the auction, these assets will offer a significant step forward for our ambitions in the USA where we started operating in 2021.”

Guy Harkless, president and CEO of Blink Fitness said: "We're pleased to reach this agreement with PureGym, which marks an important step in our sale process.

"As we've worked this year to reinvigorate our most popular locations and elevate our member experience, we're encouraged by PureGym's interest in the Blink business model and strategy and belief in Blink's mission to democratise fitness. We're confident Blink's foundation as an affordable fitness brand will provide a strong base for a new owner to build on."

PureGym has two million members across 600 gyms in six countries. It operates corporate-owned gyms in the UK, Denmark, Switzerland and the USA in addition to 20 sites operated by a franchise partner in Saudi Arabia and the UAE under the PureGym Arabia brand.

 PureGym was founded in the UK in 2009.