Property entrepreneurs the Halabi family have won the drawn-out auction for fitness club chain Esporta. Private equity backer Duke Street Capital has been investigating a sale of the business for much of this year. It was put on the block during the summer, with Citigroup appointed to organise the sale.
No price was disclosed but it is thought that the chain fetched up to €681m (£460m). The group had attracted interest from a variety of bidders, including private equity groups Apax and Blackstone as well as industry rivals such as Whitbread’s David Lloyd Leisure, LA Fitness, and Total Fitness.
Property company London & Regional was also in contention. The group bought Next Generation Clubs in May for £197.5m (US$370m). Several Middle Eastern investment entities, such as the Qatar Investment Authority and Dubai-based Istithmar, were also linked to Esporta.
The Halabi family owns former Rothschild country house Mentmore Towers in Buckinghamshire as well as the Aviva building in the City of London. The family also has a third of the company seeking to put up the Shard of Glass skyscraper at London Bridge.
Buckingham Securities advised the Halabi family. Esporta chief executive Neil Gillis said: “We are very excited about Esporta’s future. With Duke Street Capital’s support we have turned the business into one of the leading premium health clubs in the sector. With the backing of the Halabi family trust Esporta is in a great position to realise its full potential.”
Duke Street took Esporta private in July 2002 for £144m. It has since bought several competitors and refinanced the group. Bank of Scotland lent £306m in February.
Managing partner Peter Taylor said: “We wanted to buy other fitness clubs this year and found ourselves outbid by real estate investors, so we decided to sell Esporta to take advantage of this.”
The other substantial deal in this sub-sector recently took place in September, when Virgin Active bought Holmes Place. The latter’s private equity investors, Bridgepoint and Permira, retained stakes in the combined group, which is valued at £650m.