A NUMBER of private equity firms are understood to be eyeing two of the UK’s fastest-growing budget fitness chains with the aim of creating a £300m merger.
CCMP Capital, the New York-based private equity firm, and Bain Capital, the US investment firm co-founded by Republican Mitt Romney, are considering offers for Pure Gym and Gym Group, Sky News reported.
The two chains have grown rapidly since they were founded less than five years ago, exploiting a dislike among cash-strapped consumers for pricey membership fees and long-term contracts.
Pure Gym, backed by New Look founder Sir Tom Singh’s investment firm Magenta Partners, hired Canaccord Genuity Hawkpoint last year to advise on fundraising options while Gym Group, backed by a seed-stage investor Bridges Ventures hired McQueen in a similar capacity.
But a source close to the situation told City A.M. that a merger was only one option being weighed up by the potential buyers, who may choose to invest separately in the businesses.
CCMP Capital and Bain Capital both declined to comment.