Phoenix Equity Partners (“Phoenix”), a leading UK mid-market private equity firm, is pleased to announce the successful IPO of The Gym Group plc (“The Gym” or “the Company” or “the Group”), the longest established operator of low-cost gyms in the UK. The market capitalisation of The Gym at admission to trading on the London Stock Exchange will be £250 million.
Phoenix, until now the majority owner of The Gym since acquiring the Company in June 2013 for a total transaction value of £90 million, will continue to be a substantial shareholder in the Company and will generate a total realised and unrealised return of 2.5x original investment cost, the equivalent of a 47% IRR today.
Since the opening of its first gym in Hounslow in July 2008, The Gym has grown to become a leading operator of low-cost gyms in the UK with 66 sites and 363,000 members as of 30 September 2015. Under Phoenix’s ownership, the Company’s growth has continued to accelerate through a significant roll-out strategy with 11 new openings in the first nine months of 2015 alone.
For the year ended 31 December 2014, the Group generated revenue of £45.5 million and Group Adjusted EBITDA of £14.7 million, representing a compound annual growth rate of 43% and 56%, respectively, since 2012. The Group’s Adjusted EBITDA before Pre Opening Costs for the year ended 31 December 2014 was £16.7m.*
This is the second significant realisation that Phoenix has announced for its investors in 2015 following the sale of CloserStill, the business-to-business exhibition organiser, which generated a 3.6x return on original investment cost and a 60% IRR. *Pre Opening Costs primarily consist of staff costs, marketing and rent associated with new site openings.