Investee Company – Virgin Active (UK)
Investee Company Business Type – Health and fitness service provider
Type of Financing – Acquisition for expansion
Equity Providers – Bridgepoint Capital
Equity Leader (Individual) – Rob Moores, Bridgepoint Capital
Debt Providers – Heller Financial
Debt Leader (Individual) – John Foy
Equity Amount – Undisclosed
Total Deal Value – £110 million
Other Advisors – Advisers for Bridgepoint: Travers Smith Braithwaite (legal), KPMG (financial), Baird (market due diligence). Advisers for the Virgin Group: Harbottle & Lewis (legal), New Boat House (corporate finance). Advisers for the management: Gibson, Dunn and Crutcher (legal).
Comments – Bridgepoint Capital has provided financing for the £110 million acquisition for expansion of health and fitness business Virgin Active. Following the completion of the transaction, Bridgepoint will own 55 per cent of the company with Virgin owning 36.6 per cent, management 7.9 per cent and Heller Financial 0.5 per cent.
The completion of the transaction is targeted at funding the global expansion of the chain via a rollout of more clubs in the UK and rights to use the brand in Europe, North America and Asia. The immediate initiation of this plan will involve three new clubs set to open at locations in Islington, Acton and Wandsworth during the coming year.
The business currently comprises nine clubs in the UK and 76 outlets in South Africa, having opened its first club in Preston, England in 1999 and acquired its first business in South Africa in January 2001, which has since been re-structured and integrated under the Virgin Active brand.
The business will continue to be managed by Frank Reed, chief executive, and Matthew Bucknall, finance director. Both of these executives had previously secured the backing of Bridgepoint following the buyout of LivingWell Health and Leisure in 1994, now owned by the Hilton Group.
Rob Moores, a director at Bridgepoint Capital, commented: “We were attracted by Virgin Active’s performance to date and the potential of a brand that is capable of further rollout in the UK, Europe, North America and Asia.”
Bridgepoint invested from its Second European Private Equity Fund in providing backing for this deal. Previous investments in the health and fitness sector include the euro17 million buy out of LivingWell in 1994 and a euro48 million growth capital investment in Holmes Place in 1996.