VIRGIN ACTIVE is mulling a flotation of the business that could value the gym chain at over £1bn.
The company has recently met banks in South Africa, one of Virgin Active’s biggest territories, to gauge investor interest in an initial public offering (IPO), although a listing could occur elsewhere.
Virgin Active’s owners, private equity firm CVC Capital Partners and Sir Richard Branson’s Virgin Group, see an IPO as the next step for the business following its success in recent years, although the firm has not fired the starting gun.
“They’re not on the runway [towards a flotation],” one person close to the situation said, adding that the firm could still decide not to float. A company spokesperson did not comment on its plans yesterday.
Virgin Active has more than 100 gyms in both South Africa and the UK, as well as presences in Italy, Spain and Australia. Its latest set of company accounts – for 2011 – revealed a 20 per cent rise in revenues to £536.2m and earnings before interest, tax, depreciation and amortisation of £126.8m.
When CVC bought its 51 per cent stake in Virgin Active in 2011, the deal valued the firm at around £900m, but given its expansion into new markets and the gyms it has opened since then, a listing could value it at more than £1bn.
Sir Richard started Virgin Active in 1998 and it now has 122 gyms in the UK.