Bridges backs énergie Fitness to drive growth of small-box low-cost gyms

5th August 2019

Bridges Fund Management has acquired a majority stake in énergie Fitness (“énergie”), the leading UK low-cost gym franchise business with over 100 sites across the UK & Ireland, for an undisclosed sum. The investment from Bridges – a specialist in this sector – will help énergie to accelerate its growth plan and continue broadening access […]

Bridges Fund Management has acquired a majority stake in énergie Fitness (“énergie”), the leading UK low-cost gym franchise business with over 100 sites across the UK & Ireland, for an undisclosed sum. The investment from Bridges – a specialist in this sector – will help énergie to accelerate its growth plan and continue broadening access to quality health and fitness facilities.

By addressing a gap in the market for small-box format gyms in catchment areas with smaller populations, énergie can expand into areas that previously had no local access to low-cost gyms. Its franchise model also fosters a greater emphasis on customer service, with gym owners encouraged to interact with members and get involved in their local community. This has helped énergie to maintain a low member churn and to appeal to a broader, more inclusive demographic: for example, it attracts a higher-than-average number of members in the 36-50 and 50+ age brackets compared to other low-cost competitors.

Through its scalable franchise model, énergie empowers individuals to start their own low-cost gym and succeed as small business owners. On average, 50% of SMEs fail within five years, but for UK franchise owners, the equivalent figure is less than 1%. énergie is currently the third-largest low-cost gym provider in the UK and the leading low-cost gym franchisor in Europe.  It has sold 60 franchises in the past year; and with Bridges’ support, it is aiming to roll out another 30-40 new gyms per year. 

Bridges has significant expertise in the low-cost gym sector. It introduced the concept to the UK in 2007, partnering with John Treharne to launch The Gym Group, which is now a FTSE-listed business with almost 800,000 members and a valuation of over £360m. Since then Bridges has also successfully invested in Impact Fitness, a Planet Fitness franchise in the U.S., and Viva Gym Group, the leading low-cost chain in Spain and Portugal. This has given Bridges unrivalled experience of supporting the multi-site roll-out of a low-cost gym model, particularly in terms of site selection, improving operational efficiency, member experience, sales and marketing, and professionalisation of systems. This expertise – and its values-alignment with management – enabled Bridges to secure a deal with énergie in a highly competitive process.

In line with Bridges ‘Healthier Lives’ impact theme, it will support énergie to expand into more underserved areas and strengthen its member proposition, so it can drive better health outcomes for its users – particularly the older demographic, which is statistically more at-risk of obesity and long-term health conditions.

Bridges is partnering with an experienced management team led by CEO Neil King, while founder Jan Spaticchia will remain with the business as a non-executive director. CEO Philip Newborough – who has led all Bridges’ low-cost gym investments – will join the énergie board, along with Investment Manager Alison Price, while Mark Heappey, who also chairs Viva Gym Group, is joining the business as chair. Ivan Schofield will also be joining the board as a non-executive director: Ivan brings substantial expertise within the leisure sector and franchise operations specifically fromleadership roles with KFC, Hollywood Bowl Group, Itsu and Buffalo Grill in France.

Jan Spaticchia, founder of énergie Fitness, said:

“We chose to partner with Bridges because we felt they shared our vision of empowering people to transform their lives and make health and fitness accessible to people from all ages and backgrounds. Bridges is driven by the conviction that building a better future for people and the planet is also a unique opportunity to create lasting economic value. That ethos is a perfect fit with énergie’s own values and our promise to stakeholders.”

Neil King, CEO of énergie Fitness, said:

“Bridges was an obvious choice to support us in the next phase of our growth. The team has substantial experience of successful roll-outs in the sector, which will be very valuable to us as we think about how to improve our member offering and find more great sites. We also share the same passion for improving our members’ health outcomes. We’re excited that we have the opportunity to work together.”

Philip Newborough, co-CEO of Bridges, said:

“We know this sector very well and we believe énergie has identified a clear gap in the market: smaller-format, high-service gyms that can operate in areas where the large box gyms would not be able to. This allows énergie to tap into demographics that would not otherwise have access to health and fitness facilities, driving better health outcomes for these underserved populations. énergie has built a great team, and we’re looking forward to working with them to prove this model in the UK and then potentially look at expansion opportunities overseas.”

Clearwater International advised the vendors. The Clearwater team was led by Partner Richard O’Donnell, Senior Associate Zack Goddard and Associate Paris McNicol-Outch.

Richard O’Donnell, Partner at Clearwater International, said:
“Clearwater International are pleased to have advised the shareholders of énergie Fitness on the investment by Bridges Fund Management Ltd. With Bridges’ expertise within the fitness sector, we believe this is a fantastic opportunity to really elevate the business in to the next stage of its growth. We would like to wish the entire team all the best for the future.”  

Burges Salmon provided legal counsel to Bridges, while Lincoln International provided debt advisory services. The financing package to support Bridges in its acquisition was executed by RM Funds, the investment manager of RM Secured Direct Lending.

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