Consumers are getting more comfortable doing in-person workouts again and the fitness industry is seeing a comeback as a result. I’m personally considering joining a gym in the New Year. So does this mean fitness clubs are viable investments? If you look at the recent string of deals, the answer is probably yes.
Earlier in November, HGGC acquired a majority stake in Planet Fitness franchisee PF Atlantic Holdings. The latter owns and operates 42 Planet Fitness health clubs in Florida, California, New Jersey, and Pennsylvania. The target, led by co-founders CEO David Bidwell and COO Scott Linsky, has been rebranded as Grand Fitness Partners.
“Grand Fitness Partners has already exceeded pre-Covid membership and revenue figures, representing the team’s strong leadership and resilience through a trying period in the fitness space,” said HGGC partner Steven Leistner. “We believe in Planet Fitness as a long-term secular health and wellness winner.”
Private equity firms are constantly looking to back established growing brands that can grow even more. Gyms currently fit that mold because people are getting out of the house again and feel health clubs are safe to visit now.
“We believe Grand Fitness is well positioned for future organic growth and potential acquisitions of new gyms because of Dave and Scott’s strong leadership, the backing of the Planet Fitness system and the macro trends that are driving consumers back to the gym,” HGGC principal Phil Sampognaro tells Mergers & Acquisitions.
Dealmakers are telling us that the franchise sector has untapped M&A potential for PE firms, as it is a growing part of the economy. The space is attracting buyers because it allows them to buy a piece of an established brand that has been operating for a while and generates attractive cashflow.
Looks like Planet Fitness is another one of those brands.
– Demitri Diakantonis