Successful Monetization of the Company’s Operating Divisions to Create Maximum Value


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Business:

Crunch (“Crunch” or the “Company”), with fitness clubs in New York, Miami, Atlanta, San Francisco and Los Angeles at the time, championed the cause of making serious exercise fun by pioneering a philosophy of entertainment and fitness and creating unique programming that caters to an exceedingly diverse membership base. Originally founded in 1989 by Doug Levine, Crunch was acquired in 2001 by Bally Total Fitness.


Transaction:

After Bally Total Fitness divested Crunch, the Company experienced significant cash flow constraints and filed for bankruptcy protection on May 6, 2009. FocalPoint was hired as the independent financial advisor to Crunch and ultimately sold substantially all of the core assets of Crunch in a Section 363 sale to New Evolution Fitness Company and Angelo, Gordon & Co.


Challenges:

FocalPoint believed the best way to achieve maximum value for the Company was through an expedited sale pursuant to Section 363 of the Bankruptcy Code. With news of the bankruptcy in the press, the Company risked losing existing members and potential members who were concerned about the Crunch’s future.


Solution:

FocalPoint helped run an efficient sale process that minimized the period of time in Chapter 11. Establishing a ‘stalking horse’ bid gave employees and stakeholders comfort that the business would successfully emerge from bankruptcy. Eventually the stalking horse bidder, CH Fitness, Inc., an entity controlled by New Evolution Ventures and Angelo, Gordon & Co., acquired substantially all of the core assets of Crunch. FocalPoint helped sell some of the non-core assets that were not included in CH Fitness’ bid to other suitors, including LA Fitness. Crunch then emerged from the bankruptcy under the leadership of a highly qualified management team with numerous years of experience in the health club industry, including Mark Mastrov, founder of 24 Hour Fitness and founder of New Evolution Ventures.

Crunch has been sold to New Evolution Fitness Company and Angelo, Gordon & Co.

FocalPoint served as exclusive financial advisor to Crunch.

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“Crunch will emerge debt-free with a leaner, stronger portfolio of clubs in four markets.”

Mark Mastrov
Chairman, Crunch