Business
Acquisition of 18 gyms from Lifestyle Fitness
Acquisition of 18 gyms from Lifestyle Fitness.
About this update from Gym Group Plc
[{"type":"text","content":"\n \nRNS Number : 8565Q The Gym Group plc 15 September 2017 \n\n15 September 2017 \nThe Gym Group Plc\n(\"the Group\")\nAcquisition of 18 gyms from Lifestyle Fitness \n Significant acceleration of new site rollout \nThe Gym Group (\"TGG\"), the fast growing, nationwide operator of 98 low cost gyms branded \"The Gym\", announces that it has acquired 18 gyms (1) from Lifestyle Fitness for a total cash consideration of £20.5m (the \"Acquisition\"). TGG has entered into a binding sale and purchase agreement with Competition Line (U.K.) Limited (\"CLL\") the owner of the sites and the deal is expected to complete on 29 September 2017. \n\nTGG has grown rapidly since the opening of its first site in Hounslow in 2008 and has become the second largest player in the low cost gym market. It expects to open 20 new sites under its organic rollout programme in 2017, having opened 15 new sites in 2016 and 19 new sites in 2015.\n\n\n \n\n\nThe Group, as part of its stated strategy, has also sought to identify bolt-on acquisitions as a way of accelerating its rollout. \n\n \nAs a result of the Acquisition:\n \n\n· All 18 sites, which are high quality, well invested locations mainly in the Midlands and North of England (2) will transfer as going concerns including the existing membership. Staff dedicated to the sites will also transfer to TGG along with 5 other central staff. CLL will support the integration of the sites through a Transitional Services Agreement (“TSA”).\n\n\n \n\n\n· 10 of the sites will be converted to The Gym brand immediately following assignment of the leases. The Group expects these sites will have been converted by the end of Q1 2018. These 10 sites are anticipated to have the potential to perform strongly with maturity expected to be shorter than the Group’s normal two-year profile due to the existing membership base. Each conversion is expected to cost £450k.\n\n\n \n\n\n· A further 8 sites will continue to operate under the Lifestyle Fitness brand and will be considered for conversion to The Gym brand in due course. Each of these gyms will be provided with some initial capital investm...