Virgin Group ("Virgin") and CVC Capital Partners ("CVC") announced today that funds advised by CVC have agreed to acquire a controlling stake in Virgin Active, the leading international health club operator.
Following the transaction CVC will hold a 51% stake in Virgin Active. Virgin will remain a significant shareholder with a 49% stake. These stakes are before management shareholding.
The partnership between CVC and Virgin will support Virgin Active's growth in both existing and new geographies. This will be delivered by the continuation of a successful club rollout programme and further targeted acquisitions, building upon the recent acquisition of Esporta in July 2011, which added 53 health and fitness clubs (including 20 racquets clubs) to the Virgin Active UK portfolio. As part of the agreement, Virgin Active will acquire the four Australian clubs currently owned by Virgin, to mark its first expansion into the Asia-Pacific region.
Virgin Active is the world's leading health club operator with 254 clubs and 1.1 million members across the U.K., South Africa, Italy, Iberia and Australia. Founded in 1999, Virgin Active has reported 11 years of consecutive double digit revenue and profit growth, demonstrating the strength of its business model and strategy.
Completion of the transaction is expected to take place during Q4 2011.
Stephen Murphy, Group CEO of Virgin said: "We look forward to working with CVC and the management team to expand Virgin Active's portfolio of clubs internationally and to look for the right acquisitions to grow. We have enjoyed sustained success since founding the company 11 years ago, underlining the expertise of the management and the resilience of the business. We remain committed to the expansion of the group and are excited by the tremendous opportunities the partnership will now open up."
Pev Hooper, Senior Managing Director at CVC said: "We are pleased to be partnering with Virgin and acquiring a majority stake in a successful, growing international business driven by a committed and high calibre management team. We have been impressed with the consistent and significant growth that Virgin Active has delivered since its launch, and we look forward to working with management and Virgin to support the future international development of the business."
Matthew Bucknall, Chief Executive of Virgin Active said: "Since we started 11 years ago, Virgin Active has become the world's leading health club operator by operating a disciplined model that delivers real value to our members. We have exciting growth opportunities, not only in the UK following the Esporta acquisition, but also in all our other existing territories, and now also Asia-Pacific via the acquisition of the Australian Virgin Active clubs. Today's transaction brings in a new majority investor who will help accelerate the expansion of Virgin Active. CVC brings a broad international network, has an excellent track record of building businesses, as well as valuable experience in the international leisure sector. At the same time, I am delighted that Virgin, which has played a central role in our success, will remain as a significant shareholder."