Target Information

Viva Gym, a prominent low-cost gym operator in Spain, has successfully acquired Fitness Hut, the leading low-cost gym brand in Portugal. This strategic acquisition unites two of Europe’s foremost low-cost fitness groups, resulting in the creation of the largest low-cost gym organization in the Iberian Peninsula, boasting 200,000 members across 48 locations and combined annual revenues exceeding €50 million.

Both brands emphasize a 'premium low-cost' value proposition, providing affordable and accessible fitness facilities with an upscale environment. Moreover, they offer a robust selection of live class options and maintain a flexible 'no contract' policy to cater to the diverse needs of their clientele.

Industry Overview

The health and fitness industry in Spain and Portugal is experiencing significant growth, with the low-cost segment emerging as the fastest-growing portion within these markets. As consumers increasingly prioritize physical fitness and wellness, low-cost gyms have become a viable solution for many, enabling greater access to exercise facilities that were previously considered out of reach, particularly for individuals with limited incomes.

In recent years, the World Health Organization has identified physical inactivity as one of the most pressing public health challenges, leading to approximately 3.2 million global deaths annually. Increased access to fitness facilities is critical in addressing this issue, as regular exercise can significantly enhance overall health outcomes.

Government initiatives and rising health awareness campaigns in both Spain and Portugal have further fueled the growth of the fitness sector. As a result, investments in innovative and sustainable fitness solutions are garnering attention, and companies focused on affordable health and wellness are expected to thrive.

The merger of Viva Gym and Fitness Hut aligns with this growing demand, as both entities share a commitment to making fitness accessible and appealing to a broader demographic, effectively transforming how local communities engage with health and exercise.

Rationale Behind the Deal

The primary objective of this acquisition is to enhance accessibility to affordable health and fitness options across the Iberian Peninsula. By combining resources and expertise, the newly formed group aims to double its size within three years, planning to open around 14 new gyms in 2018 and targeting over 90 locations by the end of 2020.

The investment from Bridges Fund Management, in conjunction with substantial financial commitments from existing partners, demonstrates a strong belief in the growth potential of this merged entity. The synergy of the two operations is expected to yield a more resilient and innovative business model suited to capture the evolving needs of health-conscious consumers.

Investor Information

The acquisition is being spearheaded by Bridges Fund Management, a specialist investor known for its focus on sustainable and impact investing. Bridges has a history of successful ventures in the low-cost gym sector, including the launch of The Gym Group in the UK and recent investments in companies such as Viva and Impact Fitness in North America.

Bridges acquired a majority stake in Viva Gym in 2015 through its Sustainable Growth Fund III, collaborating with Magenta Partners, the original founders of Viva. The firm’s strategic vision and commitment to improving health accessibility through fitness align perfectly with the goals of the newly merged organization.

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This deal presents a compelling opportunity in the low-cost fitness market. The consolidation of Viva Gym and Fitness Hut not only creates the largest low-cost gym group in the Iberian region but also enhances operational efficiencies by leveraging shared knowledge and best practices between the two brands.

With the backing of Bridges Fund Management and the expected influx of additional capital for growth, the new entity is well-positioned to scale operations and expand its reach in a rapidly growing market. By addressing the urgent need for accessible fitness facilities, this merger holds the potential to drive positive health outcomes and generate substantial financial returns.

Moreover, the shared commitment to quality service and community engagement makes this merger not only beneficial for business growth but also for enhancing the overall health landscape in both Spain and Portugal. As consumer attitudes toward health and fitness continue to evolve, the timing for this acquisition is favorable.

Overall, the merger could be seen as an astute investment decision, establishing a formidable presence in the low-cost gym sector and paving the way for further advancements in health accessibility in the Iberian region.

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