The Bannatyne Group, which operates 66 fitness clubs, 37 spas and 5 hotels in the United Kingdom, had planned for an IPO on the Alternative Investment Market (AIM) of the London Stock Exchange emitting shares with a total value of GBP 300 million (EUR 340 million). By listing Bannatyne wanted to raise GBP 89 million (EUR 100 million) of new capital to finance its expansion and the refurbishment of its facilities. In order to strengthen its market position by positioning its offering in the premium segment, the fitness operator currently invests approximately GBP 16 million (EUR 19 million) into the modernization of its fitness equipment.

Founder Duncan Bannatyne will continue to hold the majority of shares in the group founded in 1996. After he was sentenced last year for providing false evidence in a divorce case, his personality is named to be the reason for the failure of the IPO according to press reports. However, a withdrawal of Duncan Bannatyne from the company’s board seems not to be an option in order to pave the way for a going public.

To finance further growth, the Bannatyne Group now reassesses its options for fresh capital. In 2015, the company has taken over Clarice House Group and Xpect Leisure. For the fiscal year 2015, Bannatyne doubled its pre-tax profits and increased sales by almost 3% up to GBP 101 million (EUR 139 million).

Lately, also competitor Pure Gym from the discount segment had plans for an IPO. The company could have been valued at more than GBP 500 million (approximately EUR 690 million). After the outcome of the referendum in favour of the Brexit, these plans are on hold until the markets have calmed down.

Three years ago, the investment company CCMP had acquired Pure Gym. Since then, fitness chain has been growing constantly. In 2015, the acquisition of LA Fitness has accelerated the growth of Pure Gym. In 2015, Pure Gym generated revenues of GBP 125 million (EUR 172 million), representing an 82% increase compared to the previous year. The EBITDA were 46% higher than in 2014. At year-end closing, the Company operated a total of 156 health facilities, including 24 facilities branded as LA Fitness.

Source: edelhelfer research, Bannatyne Group, Pure Gym
Image: Bannatyne Group