Empire Holdings and Investments entered agreement in principle for a $100 million commitment by Kennedy Lewis Investment Management through a senior secured first lien delayed draw term loan facility and an approximately 51% common stock investment, which is anticipated to be signed and consummated prior to the end of the year.
Kennedy Lewis will specifically provide a $100 million senior secured first lien delayed draw term loan facility with a five-year maturity and an initial draw of $5 million. The remainder will be available upon satisfaction of certain conditions. Kennedy Lewis will receive approximately 51% of Empire’s common stock as compensation for making the loan available to the company.
Empire is a wholly-owned subsidiary of Town Sports International Holdings and the parent company of luxury fitness brands TMPL, Palm Beach Sports Clubs and LIV.
“We are excited to move forward with our long-¬standing partner, Kennedy Lewis,” Patrick Walsh, CEO and chairman of the board of Empire Holdings and Investments, said. “Kennedy Lewis recognizes the essential value of the fitness industry to our country and the material benefits of health and wellness for the American people. The health of our citizens is more important to our country’s success and survival than at any time in the last 100 years. Our company’s platform is uniquely positioned to restore and rebuild the fitness industry to the benefit of the American people and provide much needed jobs to fitness industry professionals. I am excited to have Kennedy Lewis join the board and enhance their partnership with me and our team. This investment will materially increase our financial strength and attest to investor confidence in our ability to weather this unprecedented crisis and rapidly rescale our operations. We look forward to executing definitive agreements and closing the investment shortly.”
“We are proud to increase our investment and further our partnership with TMPL, Palm Beach Sports Clubs and LIV,” David Chene, co-managing partner at Kennedy Lewis, said. “The pandemic-led disruption in the fitness industry is unprecedented and provided Kennedy Lewis with the opportunity to provide much needed capital to an industry that is critical to the well-being of our country. We have tremendous confidence in Patrick Walsh and the Empire team and expect that their efforts to position the company to capitalize on opportunities presented by this disruption will further grow market share and deliver an even safer and more exceptional experience to our fitness members.”
Empire’s board will be increased to a total of five directors, with two current members retiring and three Kennedy Lewis appointees joining the board.