After much speculation about The Gym Group’s new investment partner, Phoenix Equity Partners today confirmed it has agreed terms to finance further UK expansion. Phoenix is a leading UK middle-market private equity firm. Phoenix’s strategy is to acquire significant stakes in businesses alongside management teams and work with those teams to grow their businesses. This looks to be Phoenix’s first venture into the health and fitness industry, although it does possess leisure experience through previous investments in UK restaurant and pub chains. David Burns and James Thomas, both partners at Phoenix, will join The Gym’s board of directors.
It is reported that £50 million of new capital is now available to continue growing the business with the business having a current value of between £90-100 million (GBP). John Treharne, The Gym Group CEO commented:
“We are delighted that after a competitive process we have selected Phoenix Equity Partners to support the management team in taking The Gym Group to the next exciting stage of development. This latest investment will allow us to continue with the fast rollout programme and strengthen our focus on innovative technology to deliver a high quality, affordable offering for even more people across the UK, many of whom will be first-time gym-goers.”
Bridges Ventures who has funded The Gym Group since its inception is retaining a 25% stake in the business. I am not surprised that Bridges remains involved in a business that it has been supporting since 2007. With 36 gyms now open (at June 2013), Bridges would have been exiting at the precise moment the business was building significant momentum.