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Planet Fitness declares special dividend of USD2.78 per share.

M2 EQUITYBITES-November 11, 2016-Planet Fitness declares special dividend of USD2.78 per share

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Planet Fitness Inc (NYSE:PLNT) declared on Thursday that its board of directors authorised a special cash dividend of USD2.78 per share on the shareholders of class A common stock and equivalent payments to unit holders of Pla-Fit Holdings LLC, partly financed by an amendment to its senior secured credit facility that increased the total of the term loan by USD230m.

With an ex-dividend date of 18 November 2016, this dividend will be paid on 5 December 2016 to shareholders of record as of 22 November 2016. Also, the company said that shareholders who sell their shares before the ex-dividend date, will not receive this dividend.

Additionally, the company stated that it will fund the USD275m special dividend (including payments made to unit holders of Pla-Fit Holdings) through available cash balances and incremental term loan borrowings of USD230m. Its senior credit facilities consist of USD718.45m in senior secured term loan borrowings and a USD75m senior secured revolving credit facility, after the amendment.

The senior secured term loans bear an initial interest rate of LIBOR + 350 bps post amendment, while borrowings under the senior secured revolving facility will bear an initial interest rate of LIBOR + 325 bps, with additional step ups in applicable margin to be applied as per increases in the company's total net leverage to EBITDA ratio during the life of the revolving facility.

A franchiser and operator of fitness centre in the US, the company was founded in 1992 in Dover. As of 30 September 2016, it had over 8.7m members and more than 1,200 stores in 47 states, the District of Columbia, Puerto Rico, Canada and the Dominican Republic. More than 90% of Planet Fitness stores are owned and operated by independent business men and women.

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Publication:M2 EquityBites (EQB)
Date:Nov 11, 2016
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