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Life Time Group Holdings (NYSE:LTH) announced on Monday that it closed on a sale-leaseback transaction for two properties, totaling $90 million in gross proceeds. The company noted that the transaction brings its total gross proceeds from sale-leasebacks to $130 million year-to-date.
Life Time (LTH) is also in negotiations for additional sale-leasebacks with expected gross proceeds of $40 million to $65 million, which it expects to close by the end of the third quarter. Terms were noted to be similar to recent transactions.
Life Time (LTH) highlighted that the majority of the proceeds from the transaction will be used to reduce debt and accelerate the timing for the company to achieve its priority of a net debt-to-adjusted EBITDA leverage ratio under 3X.
“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,” stated Life Time (LTH) 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 3 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.”
Shares of Life Time (LTH) rose 2.45% in premarket trading.