(Bloomberg) -- Equinox, the luxury gym operator and majority owner of SoulCycle Inc., clinched a deal for new funding from private equity firm Silver Lake as it competes against rival Peloton Interactive Inc. Terms of the transaction weren't disclosed.
The funds will be used to build Equinox's digital platform and add as many as 50 locations annually, the closely held company said Friday in a statement. Equinox operates 100 clubs across the U.S., U.K. and Canada, and has plans to enter the Middle East. It has said it will introduce a SoulCycle bike designed for at-home use -- a direct challenge to Peloton's best-known product.
Shares of Peloton fell 4.9% to $27.57 at 10:15 a.m. in New York, adding to Thursday's 11% plunge on the company's disappointing sales projections.
“As we accelerate our expansion while delivering a first-of-its-kind online/offline experience for our growing global community, Silver Lake is providing valuable expertise as well as capital to fuel this next stage of growth,” Harvey Spevak, Equinox's executive chairman, said in the statement.
Read more: Gym chains wrestle with debt even as fitness industry grows
Equinox has counted Morgan Stanley Chief Executive Officer James Gorman and celebrities such as Andy Cohen and Hilary Swank among its members, while its SoulCycle brand has been featured on television shows and movies.
The company, which is also backed by consumer-focused private equity firm L Catterton, in August announced a digital platform to capitalize on members' desire to work out at home or while traveling.
--With assistance from Gillian Tan and Crystal Tse.
To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson
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