Cinven to unload Fitness First for £835 million |
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Sat, 24 Sep 2005 13:05
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LONDON - Private equity firm BC Partners has reached a deal with rivals Cinven to buyout one of the world's largest gym chains, Fitness First for £835 million ($1.5 billion).
Cinven had first brought Fintess First in January 2003 for £404 million, thus making the previously public company private and completely turning it around over the course of the last two years. Cinven had first put up Fitness First for sale in June in an auction run by UBS, the investment bank.
BC Partners have announced that they would look to expand the health chain by opening up to 250 new Fitness First outlets. Currently, Fitness First has about 424 outlets across fifteen countries all over the world and boasts of over 1 million members. BC is investing close to £250 million of equity in the deal and has indicated its willingness to inject more cash into the chain although most of it is bound to come out of Fitness First's cash flow.
"After a period of rapid UK domestic and international growth, Fitness First found itself in a difficult position as a publicly listed company: market sentiment had moved against the sector as a whole and, following a profits warning, the business lacked access to debt and equity capital markets to exploit the commercial opportunities available to it," said Yagnish Chotai, a Partner of Cinven clarifying the move to sell the company. This is the second high-profile sale undertaken by Cinven after it sold NCP, the UK's largest operator of car parks in August. The proceeds of both these sales allows Cinven to return €3 billion to investors.
Cinven was largely responsible for Fitness First’s penetration and the eventual domination in the Asian and Australian markets. In fact it is the lucrative Asian market that has attracted BC Partner's attention towards Fitness First.
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