Gym operator Virgin Active is trimming the fat and selling 35 of its UK clubs to rival Nuffield Health as part of plans to refocus on its more exclusive locations.
The deal is expected to complete this summer, with the clubs, their members and staff moving across to Nuffield.
Virgin Active will have 61 clubs left in the UK, based around London and other major towns and cities, and said it wants to re-organise the business around three key pillars – high-end "Collection" clubs, big family clubs and racquets clubs.
The money raised from the sale, which has not been disclosed, will be used to pay for the group's club upgrade and new club rollout programmes.
The company said it's "already engaged in a significant investment programme in the UK which will now be increased following this transaction".
Virgin Active plans to upgrade a further 10 London clubs into its Collection group of clubs, adding to the 11 in the UK and 17 worldwide, including two new clubs opened in London, at Merchant Square and Walbrook, in 2015. A new Collection club in Mansion House will also be opened later this year, using an investment of over £6.5m and creating 80 new jobs.
“This transaction is an acceleration of our global strategy to focus on high end clubs in metropolitan areas. We will have a far more focused UK business with particular strength in London, the South East and bigger towns and cities," said Virgin Active chief exec Paul Woolf.
"It will also help accelerate investment into our UK estate, particularly as we continue to grow our UK Collection portfolio of clubs."
Viring Active said that it has been focused on operating and developing prime sites around the world since South African private equity firm Brait bought the group for £1.3bn in 2015. Before it was taken over, Virgin Active had been exploring a float on the Johannesburg Stock Exchange.
Meanwhile, the sale brings the number of Nuffield Health gyms to 112. Nuffield boss Steve Gray said the acquisition is "a great move forward".
"Research shows that UK consumers have an appetite for direct access to a range of health and wellbeing services in their communities and this is also true of employers providing corporate fitness and wellbeing facilities for their staff," he added.
"This acquisition will increase our reach in key sought-after locations and allow both members and non-members access to broader health and wellbeing services as well as proximity to Nuffield Health hospitals. I'm delighted to welcome new members and teams to the Nuffield Health family and firmly believe that they will benefit from our broader health and wellbeing model."