Oaktree merges Fitness First Asia with Navis-owned gym business

The combined entity, known as Evolution Wellness Holdings, will have 152 wholly-owned fitness clubs with around 7,000 staff and 400,000 members. Annual revenue will be approximately $295 million, comprising $219 million from Fitness First and $76 million from Celebrity Fitness. Oaktree and Navis will hold equal stakes in the business.

Oaktree has owned the global Fitness First business since 2012 when it and fellow creditor Marathon Asset Management completed a debt-for-equity swap worth around GBP565 million ($733 million). They assumed control from BC Partners, which bought Fitness First from Cinven in 2005 for GBP835 million.

As early as 2011, when plans for an IPO in Singapore were abandoned, the possibility of carving up Fitness First's assets by geography came under consideration. It was reported in 2016 that Oaktree had appointed banks to assess a break-up of the business, which has more than 370 clubs and around one million members across the UK, mainland Europe and Asia Pacific.

Last September Fitness First Australia, which has 65 outlets and over 240,000 members, was sold to Quadrant Private Equity for an undisclosed sum. The remaining Asia assets span Singapore, Malaysia, Indonesia, Thailand, the Philippines and Hong Kong, with 90 clubs, over 222,000 members and close to 15 million visits a year.

Celebrity Fitness, which Navis has owned since 2007, has 62 clubs and 178,000 members, primarily in Malaysia and Indonesia. The merger will create a business with a large footprint in Southeast Asia. Gym membership penetration in the region is just 4.2% compared to 14.8% in Australia, 12.4% in the UK, and 11.4% in New Zealand, according to the International Health, Racquet & Sportsclub Association.

Evolution Wellness plans to add new locations throughout Asia, exploit economies of scale, leverage technology to enhance member experience and convenience, and introduce new products such as pay-as-you-go group fitness packages.

"We've invested heavily into the Fitness First business, especially here in Asia, and have been delighted with the market response to our investments in club design and innovation. We're looking forward to this next chapter of growth for Fitness First in Asia alongside that of Celebrity Fitness; we're excited to partner with Navis to create a leading Asian fitness offering for the benefit of our combined customers," Justin Bickle, a managing director with Oaktree, said in a statement.

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• Topics
• Southeast Asia
• Consumer
• Expansion
• Singapore
• Indonesia
• Thailand
• Malaysia
• Oaktree Capital
• Navis Management
• M&A