Leonard Green acquires gym chain for £600m
2017 has continued to provide rich pickings for firms with marquee private equity practices on either side of the Atlantic, with Latham & Watkins, Ropes & Gray and Travers Smith leading as US private equity house Leonard Green & Partners announced its £600m acquisition of PureGym from buyout firm CCMP Capital Advisors in November.
Latham advised Leonard Green on the deal, with London-based corporate partners Kem Ihenacho and Farah O’Brien, and New York-based Howard Sobel leading on the buyout side. London head Jayanthi Sadanandan and partner Jocelyn Seitzman led for the firm on the financing aspects.
Latham previously advised Leonard Green on its £2.4bn acquisition of CPA Global earlier this year. The buyout house acquired the intellectual property technology company from British private equity firm Cinven.
Phil Sanderson led the Ropes team advising CCMP, alongside tax partner Brenda Coleman. Sanderson’s former firm Travers Smith acted for PureGym’s management team, with private equity partner Edmund Reed leading with tax partner Hannah Manning. With Travers and Ropes possibly going head to head over Travers trophy client Bridgepoint, overlaps between the City deal shop and Boston-based trailblazer in London continue.
The low-cost gym chain was launched in 2009, pioneering a model in which members pay monthly with no contract commitment. CCMP bought an 80% stake in the gym in 2013, valuing it at £140m. PureGym now has more than 950,000 members spread across 189 sites.
PureGym acquired LA Fitness in 2015, while an attempt to merge with The Gym Group was vetoed by competition authorities. A year ago, it abandoned plans for an initial public offering due to what the company described as challenging market conditions.
The new investor, Los Angeles-based Leonard Green focuses on companies providing services, including consumer, business, healthcare and retail. Its portfolio includes fast-food chain Shake Shack and retailer Topshop. Its most recent fund, Green Equity Investors VII, closed in 2016 with $9.6bn of committed capital.