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Flywheel spins investor interest following a change of hands last month: Bloomberg
Posted on Monday, 13 May 2019 11:51
Flywheel Sports could potentially be on the block soon, after Kennedy Lewis Investment Management took control of the boutique fitness studio chain last month and is said to be working on a range of options, Bloomberg reported.
According to people with knowledge of the matter, cited by the news provider, the new majority owner has hired Houlihan Lokey to explore strategic alternatives, including a full or partial sale.
Possible buyers have already expressed interest, the insiders added, noting private equity firms and family offices are among those watching Flywheel.
A deal, should one take place, could potentially be the largest announced in the fitness and recreational sports centres sector since Leonard Green & Partners picked up an unknown majority stake in UK-based Pure Gym for GBP 600.00 million back in 2017, according to Zephyr, the M&A database published by Bureau van Djik.
This is based on the USD 350.00 million valuation that sources gave when speaking to the Financial Times back in December, when it was reported that Flywheel had pulled out of plans to sell all or part of itself due to a lack of interest.
At the time, insiders said the process was being run by a different advisory firm.
Flywheel was co-founded in 2010 by RuthZukerman, one of the founders of SoulCycle, a popular spinning studio chain in the US.
It has over 40 locations from the Hamptons to West Hollywood and is known for its high-intensity indoor cycling and barre classes.
Last month, Kennedy Lewis increased its holding in Flywheel to 75.0 per cent with a USD 15.00 million investment, following an initial cash loan last year to refinance debt and provide working capital for building the target’s in-home operations.
The Benvolio Group, which injected USD 109.00 million back in 2014, holds the remaining 15.0 per cent, according to Bloomberg’s sources.
David Chene, a founder at Kennedy Lewis, said the company is exploring growth opportunities for the at-home bike launched by Flywheel.
The product retails at USD 1,699 before tax, delivery and a USD 39.00 per month subscription.
A person familiar with Flywheel’s plans told Bloomberg that the group has weighed growth options for its at-home business after not receiving as much consumer attention as it predicted.
It is now considering selling the bikes through Amazon and Best Buy, the insider added, while also noting that most of the company’s studios are profitable.
© Zephus Ltd