Target: World Health Club
Sponsor: North Castle Partners
Seller: International Fitness Inc.
Financial Adviser: Seller: Partnership Capital Growth
Legal Adviser: Sponsor: Morrison Cohen LLP
Were it made in the United States, such an investment might look highly risky. Not in oil-rich Western Canada, where the economy is booming and where North Castle is looking for other deals as well, said Doug Lehrman, a managing director who leads the firm’s investments in fitness and recreation. “We thought that the Calgary and Edmonton marketplace was and is an interesting marketplace,” Lehrman said.
Terms of the deal were not released, though the Greenwich, Conn.-based buyout shop typically spends $20 million to $30 million of equity for companies generating high single-digit millions to $25 million of EBITDA. York Street Capital Partners provided senior and mezzanine financing. Partnership Capital Growth, an advisory firm based in San Francisco, brokered the deal.
North Castle, which invests exclusively in businesses that benefit from healthy living and aging trends, has a three-pronged strategy to expand World Health Club, which runs 14 clubs with 40,000 members. The firm intends to invest in its existing clubs, build brand-new clubs, and acquire potential competitors.
It isn’t the first time the firm has invested in fitness clubs. In 2000 the firm teamed up with
North Castle is also an investor in Octane Fitness Holdings Inc., a designer and distributor of low-impact cardiovascular fitness equipment; Cascade Helmet Holdings, a company that makes athletic helmets; and Performance Inc., an independent bicycle dealer and direct marketer of bicycles and cycling accessories.
The firm made the deal out of its