Information on the Target

Leejam Sports Company, also known as "Fitness Time," is the largest fitness center operator in Saudi Arabia and the MENA region. As of December 31, 2017, Leejam operated over 112 fitness centers, with 108 located in 23 Saudi cities and four in the UAE. The company gained recognition by being ranked 17th globally by the International Health, Racquet & Sports Club Association (IHRSA) in its 2017 "Global 25" list, which evaluates fitness center chains based on the number of owned locations.

In July 2017, Leejam made a significant move by opening its first ladies-only fitness center in Saudi Arabia, signaling its commitment to expanding its offerings and catering to diverse customer segments. With plans to continue tapping into the growing fitness market, Leejam is well-positioned for future growth alongside its established male fitness services.

Industry Overview in Saudi Arabia

The fitness industry in Saudi Arabia has been experiencing significant growth driven by an increasing emphasis on health and wellness. The government's Vision 2030 initiative is actively promoting healthier lifestyles, which has led to greater public awareness and demand for fitness services.

Moreover, with rising disposable incomes and a youthful population, more Saudis are seeking fitness solutions that align with their lifestyle choices. The introduction of modern gyms and fitness studios has created a more competitive market, encouraging existing operators to enhance their service offerings and invest in state-of-the-art equipment.

The landscape has also seen increasing diversity in fitness companies, offering various programs that cater to both men and women. This trend reflects a broader cultural shift toward inclusivity, as evidenced by the recent developments in ladies-only fitness facilities.

As competition intensifies, the fitness industry’s growth potential remains robust, suggesting positive prospects for key players like Leejam who are equipped to meet diverse consumer needs.

The Rationale Behind the Deal

Investcorp's decision to list Leejam Sports Company on the Saudi Stock Exchange, known as Tadawul, stems from a strategic vision to capitalize on market opportunities presented by the booming fitness sector in the region. Following its acquisition of a 25.1% stake in the company in 2013, Investcorp has actively collaborated with Leejam’s management team to implement growth-oriented initiatives.

The listing serves as a validation of Leejam's successful business model and operational effectiveness, while also providing the company with enhanced access to capital for future expansion. By publicly trading shares, Leejam can leverage greater visibility and credibility in the market, fostering new avenues for growth.

Information about the Investor

Investcorp is a global provider and manager of alternative investment products, with a strong presence in the Gulf region. Founded in 1982, the firm has established itself as a leading investment institution, particularly in private equity and real estate. Its Gulf Opportunity Fund I has become a significant player in the Saudi investment landscape, underpinning several successful ventures.

With seven deals closed in Saudi Arabia since 2009, Investcorp’s expertise in management and operational development has played an essential role in transforming its portfolio companies into market leaders. The firm is dedicated to contributing to the economic diversification goals outlined in Saudi Arabia’s Vision 2030.

View of Dealert

This IPO marks a vital achievement for Investcorp and establishes Leejam as a significant entity in the fitness industry, which is poised for growth in the coming years. The firm’s strategic initiatives have successfully fortified Leejam’s market leadership and positioned it for long-term success. The decision to go public is expected to unlock further investment potential and provide necessary funds for continued expansion.

Moreover, the integration of innovative services and facilities, particularly the introduction of ladies-only centers, suggests that Leejam is not only addressing current market demands but also anticipating future trends. This adaptive approach aligns well with consumer preferences, enhancing their competitive edge.

From an investment perspective, the flourishment of the fitness sector in Saudi Arabia, coupled with Leejam's strong operational foundation, indicates that this could be a strategic move for investors looking to capitalize on one of the region's most vibrant industries. The public listing further strengthens Leejam's brand and credibility, crucial factors for growth in this market.

Overall, the IPO of Leejam Sports Company has the potential to yield fruitful returns, making it an attractive investment opportunity within the rapidly evolving landscape of the Saudi fitness industry.

View Original Article