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Wen | Ma Lian Hong
Sports big business reporter
Recently, PureGym, the uk's largest offline fitness chain, announced that it has received a £300 million injection (about 2.5 billion yuan) from THE US PE giant KKR, which will acquire part of PureGym's shares as one of the shareholders. In this round of transactions, PureGym is valued at more than £1.5 billion (about 12.7 billion yuan).
Previously, PureGym was preparing to go public and seeking to expand its scale. With investment from KKR, PureGym will continue to expand locally and continue to expand overseas markets. PureGym said it has already opened franchise gyms in Saudi Arabia, and in the next phase they plan to open three pilot gyms in the U.S. and plan to double the number of gyms in the U.K. and Switzerland.
Endorsed by the first person in the history of the British Olympic Games
Private health and health clubs are among the fastest growing industries in the UK. There are nearly 6,700 health clubs in the UK, and about 189,000 people are involved in sports and fitness-related workers. In pre-pandemic 2019, the UK had around 9.7 million perennial fitness members, second only to Germany among European countries, spending £3.4 billion (about 28.8 billion yuan) a year on private health and health clubs.
Founded in 2008 and owning Three brands, PureGym (UK), Fitness World (Denmark) and Basefit (Switzerland), headquartered in Leeds, UK, is currently the largest gym chain in the UK with 500 gyms and 1.6 million members.
PureGym is a people-friendly chain fitness brand, positioning "low price and quality service experience", providing services similar to shared fitness, no swimming pool, sauna, water bar and leisure area and other projects, taking a more flexible monthly payment model, with a monthly membership fee of only 19.99 pounds (about 169 yuan), and providing 24h full-day operation services. In addition to more than 220 high-quality fitness equipment, PureGym offers nearly 80 free lessons per week to 1,900 personal trainers. Compared with the nearly 1,000 yuan dues of competitors around it, Pure Gym's cost-effective and flexible service solutions are very competitive among mass consumer groups.
In 2008, Peter Roberts, a fitness practitioner for many years, founded PureGym. Private equity firm CCMP Capital Advisors acquired a majority stake in PureGym in 2013, and in 2015, after a failed £300 million merger with rival Gym Group, PureGym acquired another smaller rival, LA Fitness, to become the UK's largest gym chain operator.
In June 2015, PureGym welcomed one of its most important investors: Sir Chris Hoy. Born in Edinburgh, Chris is a legendary cyclist. In his 13-year career, Hoy has won six gold medals and one silver medal in Olympic competitions, starting with the 2000 Sydney Olympic Games, in addition to winning 11 World Championships. Hoy, Britain's most ever champion Accolade, is seen by the media as the first person in British Olympic history, a record that was not broken until this year's Tokyo Olympics by British cyclist Jason Kenny's seven gold medals.
Hoy is seen as the first person in British Olympic history
At the 2008 Beijing Olympics, Hoy won three gold medals in a row, becoming the only Briton in 100 years to win three gold medals at the same Olympic Games. At london 2012, Hoy was the flag bearer of the British Olympic team. It is worth mentioning that he was the first British cyclist to act as a standard-bearer at the opening ceremony of the Olympic Games.
Hoy was the flag bearer of the British Olympic team at the London 2012 Olympics
In 2015, two years after retiring, Hoy announced his investment in PureGym and became one of the company's ambassadors and business advisors. That same year, PureGym rebranded its brand image with its first television commercial. At the time, PureGym had only 163 gyms and nearly 800,000 members. The addition of Hoy not only made Pure Gym more famous, but also laid the groundwork for the subsequent two listings of PureGym.
Hoy invested in PureGym and became an ambassador for the company
Bad luck, PureGym was stranded twice
For the past five years, PureGym has been looking for a listing opportunity. In 2016, PureGym announced plans to launch its first IPO on the London Stock Exchange to raise £190 million. But in June 2016, the Uk's referendum decided to "leave the EUROPEAN Union", and the first competitor to go public, The Gym Group, briefly fell below its initial IPO price during the turmoil. After evaluation, PureGym suspended its listing due to unstable market conditions and other reasons.
In 2017, Los Angeles-based private equity firm Leonard Green & Partners bought a majority stake in PureGym at a valuation of £600 million. In 2020, LGD again invested £100 million in PureGym to address the threat posed by the pandemic and to expand new stores in due course, agreeing to increase PureGym's revolving line of credit to £50 million. After KKR's stake in PureGym, LGP will retain its majority stake. Since then, PureGym has expanded its business footprint to Denmark and Switzerland through mergers and acquisitions, with the larger transaction acquiring Denmark's Fitness World for £350 million.
In August 2021, PureGym again announced its intention to go public, hoping to help the company expand through market fund-raising to meet the rebound in demand for fitness after the relaxation of the epidemic restrictions. LGP has appointed an investment bank advisor to PureGym to actively explore fundraising options and plans to go public by the end of the year as soon as possible.
However, after KKR's stake, PureGym did not update its listing plans. Not long ago, the UK re-launched the guidance of working from home, which will greatly affect the arrival rate of customers for gyms that have just resumed foot traffic, perhaps because the UK's largest gym chain has once again shelved its listing plans in view of the uncertainty of the epidemic.
However, PureGym still has the potential to go public. Since 2021, PureGym has opened 20 new stores, 18 of which are located in the UK. The latest quarterly earnings report shows that in the three months ended 30 September, PureGym revenue was £111 million due to business expansion, up from the same period in 2019, and had nearly £800 million of guaranteed net debt. In response to the home fitness business's success during the pandemic, PureGym also plans to launch a Peloton-like smart spinning bike next year.
Note: The images used in this article are from the Internet
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