Bridges-backed Viva Gym acquires Fitness Hut to create Iberian low-cost market leader
- Our Spanish portfolio company Viva Gym and Portugal’s Fitness Hut, two of Europe’s leading low-cost gym groups, are joining forces
- Together they will constitute the largest low-cost gym group in Iberia, with almost 200,000 members and revenues of more than €50m
- The combined group will focus on driving better access to affordable health and fitness, as a means of improving health outcomes
- Acquisition financing provided by Ares, plus significant follow-on acquisition capability to support the group’s plan to roughly double in size in the next three years
Viva Gym (“Viva”), a leading Spanish low-cost gym business, has acquired Fitness Hut, the leading Portuguese low-cost gym business, in a deal led by specialist sustainable and impact investor Bridges Fund Management (“Bridges”). This will create the biggest low-cost fitness group in the Iberian region, with 200,000 members across 48 sites, combined revenues of over €50m, and ambitious growth plans for the next few years.
Bridges acquired a majority stake in Viva in 2015 via its Sustainable Growth Fund III, investing alongside Magenta Partners (“Magenta”), the investment firm that founded Viva in 2011. The acquisition of Fitness Hut has been made possible by a further investment from Fund III and Magenta, plus additional co-investment from Hermes GPE and the two management teams, who remain committed to the business. Fitness Hut’s founding investor Edge Capital and subsequent investor OxyCapital will exit as part of the deal.
Alternative lender Ares Management has provided all acquisition facilities, plus a significant committed follow-on capital capacity to fund further growth.
The health and fitness sector continues to thrive in both Spain and Portugal, and the low-cost segment is the fastest-growing part of those markets. Together, the combined group – which will be led by Viva CEO Juan del Río Nieto and will continue to operate under two separate brands – currently operates 48 sites. With the new facilities in place, management now expects to add another 14 gyms in 2018, with a target of over 90 sites across the group by the end of 2020.
The World Health Organisation has identified physical inactivity as one of the most significant public health risks, contributing to an estimated 3.2 million deaths globally every year. Regular exercise can help tackle this growing problem; but exercise facilities are often inaccessible or unaffordable for those on low incomes.
Bridges has extensive experience in the low-cost gym sector: originally by launching The Gym Group, which pioneered the concept to the UK, and more recently as an investor in both Viva and Impact Fitness, a rapidly-expanding low-cost operator in North America. These companies are helping to bring health and fitness to a new demographic: last year alone, they signed up almost 60,000 people who had never been members of a gym before.
Juan del Río Nieto, CEO of Viva Gym, said:
“Both Viva Gym and Fitness Hut have a clear ‘premium low-cost’ value proposition. They offer affordable and accessible gyms in prime locations, with an upmarket look and feel. The proposition also includes a significant live class offering and a ‘no contract’ policy to ensure member flexibility. These shared values and skills will enable the combined group to be a better, stronger business, which will remain committed to market leadership and innovation.”
James Hurrell, Investment Director at Bridges, said:
“Bridges has known the Fitness Hut team for six years, and we have long admired the business they have built. By bringing these two companies together, we have built a highly experienced and complementary management team and Board. There is a clear opportunity for the two brands to improve their offering by sharing knowledge and best practice, and committed funding is in place to deliver an accelerated growth plan. Given Bridges’ track record of improving accessibility to fitness and driving better health outcomes, we think this is a great opportunity to create another ‘best in class’ operator within the European low-cost gym sector.”
Nick Coutts, Co-Founder of Fitness Hut, said:
“We’ve come to know the Bridges and Viva teams very well over the last few years, so they were an obvious choice of partner as we embark on our next phase of growth. We’re very excited about the opportunity for low-cost fitness in Iberia, and we look forward to working with our new partners to become the undisputed market leader in Spain and Portugal.”
Legal advisor to Viva: Eversheds Sutherland
Debt advisor to Viva: Lincoln International
Commercial and Financial diligence: EY
Corporate finance advisor to Fitness Hut: Clearwater International