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Quadrant exercises exit options: report
Posted on Friday, 11 January 2019 12:32
Quadrant has hired Citi and UBS to explore ways to exit Fitness and Lifestyle, the Australian overarching gym brand formed in 2016 to carry out acquisitions in the sector, the Australian Financial Review (AFR) reported.
According to the publication’s Street Talk column, the advisors have already started sounding out interest in a potential sale of the AUD 2.00 billion (USD 1.44 billion) chain and have even held some early-stage discussions with possible suitors.
The article indicated one of the options on the table is a sale to another buyout house or to an international company already operating in the industry, and a formal bidding process is expected to start in the coming months.
Quadrant used Fitness as a vehicle to acquire Goodlife Health Clubs in October 2016, which was followed by Jetts Australia in November and Fitness First Australia in December.
The operations have since been combined under one banner and the business is focused on driving earnings growth, particularly via targeted brand initiatives and new customer propositions, such as investment in technology.
Fitness has over 470 health clubs across the country, Australia, New Zealand and South-East Asia, more than 725,000 members and 25,000+ online programme subscribers, according to its website.
The group now has a total of ten customer-facing brands, which also include Barry’s Bootcamp Asia-Pacific and kubofit.
Zephyr, the M&A database published by Bureau van Dijk, shows the largest-ever acquisition of a fitness and recreational sports centre was the buyout of Life Time in 2015 for USD 4.00 billion.
Only six other purchases targeting the sector - out of a total 945 deals - have exceeded USD 1.00 billion, including David Lloyd in 2007 (USD 1.88 billion) and Virgin Active South Africa in 2011 (USD 1.60 billion).
Should Quadrant manage to flex its muscles to achieve an AUD 2.00 billion valuation for Fitness, then the sale would be the seventh-largest on record, globally.
© Zephus Ltd