On Friday, June 28, Life Time reported closing on a sale-leaseback transaction for two properties totaling $90 million in gross proceeds. This transaction brings the company’s total gross proceeds from sale-leasebacks to $130 million year-to-date.
The company is also negotiating additional sale-leasebacks with expected gross proceeds of $40 million to $65 million, which it intends to close by the end of the third quarter. Terms are similar to recent transactions.
The company reported it will use most of the proceeds from this transaction to reduce debt and accelerate the timing to achieve its priority of a net debt-to-adjusted EBITDA leverage ratio under 3 times. “The continued strong financial performance of the company’s business will be more than sufficient to cover the incremental rent expense from these transactions,” noted Life Time in a release.
“We are excited that we are on track to deliver positive free cash flow in the second quarter even without the proceeds from these sale-leasebacks,” said Life Time Founder, Chairman, and CEO Bahram Akradi. “These sale-leaseback transactions will additionally support the great progress we are making towards reducing our net debt-to-adjusted EBITDA leverage ratio to under three times sooner than expected, and we are confident that we will grow our revenue and Adjusted EBITDA by low double digits while continuing to deliver positive free cash flow.”
Image courtesy Life Time
