Phoenix Equity Partners announces the successful IPO of The Gym Group

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.*

We are delighted with The Gym’s successful IPO. The Company has grown from strength to strength over the last few years, opening an impressive number of new gyms to service the growing demand for its low-cost and flexible customer proposition. Phoenix has a tradition of backing high-growth small and medium UK companies to help them achieve their ambitions and to deliver strong returns for our investors. We continue to be substantial investors in the Company and look forward to more success with John Treharne and his management team.
— David Burns Managing Partner at Phoenix Equity Partners
We would like to thank Phoenix for all their support over the last few years. Their backing was instrumental in helping us accelerate our growth strategy and we are pleased that they will remain significant shareholders in the Company as we continue to expand in the years to come.
— John Treharne, CEO of The Gym Group

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.