BC Partners replaces Fitness First management team

The new appointments follow BC Partners' abandoned attempts to list Fitness First in Singapore in the absence of a buyer for the gym chain. The IPO plans were aborted due to the global financial market volatility.

The private equity owner has appointed Chris Stone as chief executive following his successful turnaround of KKR-backed Northgate Information Solutions. The gym chain's CFO and head of the UK have also been replaced. The move aims to protect BC's GBP300 million ($473 million) equity investment in the company, which is now said to have high-interest debt worth GP550 million on its books.

Singaporean regulators granted UK-based BC approval to list Fitness First last August, with a view to late September trading debut. It was reported last October that BC Partners may reconsider a Singapore IPO next year for its Asia Pacific operations. In the meantime, it hopes to sell these gyms - which number 165 branches and more than 400,000 members in Asia and Australia - for approximately $1 billion. The assets have generated interest because they represent the company's fastest-growing division.

Finding an acquirer for such a large group of assets may not be an easy endeavor. Sources told the newswire that CVC Capital, which purchased a 51% stake in Richard Branson's Virgin Active health club chain in August, was not interested in incorporating Fitness First's 90-plus Australian outlets into the Virgin Active brand. Australia's largest firms, including Archer Capital, CHAMP Private Equity and Pacific Equity Partners, have also indicated that they won't pursue the asset.

BC Partners bought Fitness First in 2005 from European firm Cinven, for $1.4 billion (at 2010 valuations). Cinven acquired the company in 2003 for $721.5 million (at 2010 valuations).

The private equity house is due to commence talks with the company's creditors next month to discuss the refinancing of its debt load, which some industry professionals consider unsustainable. Much of the debt matures at the end of next year. However, the crucial revolving debt facility is set to expire in November.

Partner Stefano Quadrio Curzio was recently replaced as chairman of the Fitness First board by Managing Partner Andrew Newington.

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• Topics
• Restructuring
• Southeast Asia
• Consumer
• Singapore
• BC Partners
• Cinven
• IPO