FORT WORTH—Fort Worth-based TPG, along with Los Angeles-based Leonard Green & Partners, have acquired Life Time Fitness Inc. in a transaction valued at more than $4 billion. Other key investors include LNK Partners and Life Time chairman, president and CEO Bahram Akradi, who will remain in his role and has committed to make a rollover investment of $125 million in Life Time common stock.

Life Time's board of directors unanimously approved the merger agreement and has recommended that the company's shareholders vote in favor of the transaction.

Under the terms of the merger agreement the investors will acquire all of the outstanding shares of Life Time Fitness common stock for $72.10 per share in cash. This price represents a significant premium to Life Time's closing share price of $41.60 on August 22, 2014, the most recent trading day before the company announced that its board of directors and senior management team had initiated a process to explore a potential conversion of real estate assets into a REIT.

The merger is subject to approval from Life Time's shareholders and other customary closing conditions. The transaction is currently expected to close in the third quarter of 2015.

“Following a comprehensive review by Life Time's board of directors of strategic alternatives to enhance shareholder value, we are pleased to have reached this agreement, which provides our shareholders with immediate and substantial cash value representing a significant premium to our unaffected share price,” said Akradi in a release. “There are no words to describe my gratitude for the confidence and significant commitment Leonard Green & Partners, TPG and LNK Partners have made to Life Time and our management team.”

“Life Time is a differentiated market leader with a long history of consistent performance and significant growth potential,” said Jonathan Coslet, chief investment officer at TPG. “We are excited to partner with Bahram Akradi and his team on the next chapter of the company's growth.”

Guggenheim Securities and Wells Fargo Securities are serving as the company's financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP and Faegre Baker Daniels LLP are serving as its legal advisors. Latham & Watkins LLP is serving as legal advisor to Leonard Green & Partners and Ropes & Gray LLP is serving as legal advisor to TPG. Fully committed debt financing is expected to be provided by affiliates of Deutsche Bank Securities Inc., Goldman, Sachs & Co., Jefferies, BMO Capital Markets, RBC Capital Markets, Macquarie Capital and Nomura, who also are serving as financial advisors to Leonard Green & Partners and TPG. Kirkland & Ellis LLP served as legal advisor to LNK Partners.