Australia’s Quadrant PE said to explore sale of $1.4b Fitness and Lifestyle Group

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Australian buyout firm Quadrant Private Equity is exploring options to exit its investment in one of the country’s largest gym businesses, Fitness and Lifestyle Group, the Australian Financial Review reported on Thursday.

The firm has hired investment banks Citi and UBS to find a buyer, which could be an offshore industry player or a large global private equity firm, the report added. While Quadrant did have initial discussions with a couple of private equity firms, a formal sale process is expected to kick-off in the coming months.

Law firm Gilbert + Tobin has also been roped in for legal advice on the deal.

Quadrant acquired Goodlife Health Clubs, Jetts Australia, and Fitness First Australia in 2016, and consequently brought all the three businesses under the banner of Fitness and Lifestyle Group. The group also acquired Tasmanian-based Zap Fitness at a reported cost of $50 million a year ago. Its other brands include Zap Fitness 24/7, and Barry’s Bootcamp Asia-Pacific.

Brisbane-based Fitness and Lifestyle Group, which is valued at approximately A$2 billion ($1.43 billion), owns and manages fitness centres, and franchises health clubs. The group is present in 450 locations across Australia, New Zealand and Southeast Asia, and has over 700,000 members, per its LinkedIn profile. The company also provides on-demand digital health and fitness programs via its Loup business.

Sydney-based Quadrant had closed its sixth buyout fund at $864 million (A$1.15 billion) in December 2017, 12 per cent higher than its previous estimate of $770 million. The firm raised $746 million (A$980 million) for its fifth fund in August 2016, its largest at that time.

Quadrant is headed by Chris Hadley, Justin Ryan, Marcus Darville, Jonathon Pearce and Alex Eady. It is known to invest in companies in Australia and New Zealand across sectors including retail, healthcare, media, consumer foods and financial services. Its other portfolio companies include Rockpool Dining Group, Experience Australia, Amart Furniture and HomeCare Holdings.

Some of the other notable deals in the fitness space in Asia include India’s Cure.Fit ‘s acquisition of Fitness First brand and its 10 outlets in September 2018, and Singapore’s sovereign wealth fund GIC’s S$36.9-million investment in Brazilian gym chain Smartfit Escola de Ginastica e Danca SA for an undisclosed stake in May.

Earlier this week, fitness marketplace startup ClassPass announced the acquisition of its Asia-based competitor GuavaPass to accelerate its international expansion.

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