Advent Gets In Shape For Fitness First Bid

The buyout firm which employs the former boss of Fitness First is preparing a takeover bid for the health and fitness chain as its owners plot an international break-up.

Sky News understands that Advent International is drawing up plans to acquire parts of Fitness First, including its British operations.

Advent recruited Andrew Cosslett, the former chief executive of InterContinental Hotels Group, as an operating partner last November, while he was still Fitness First's chairman.

A spokeswoman for the gyms group said that Mr Cosslett had ceased to hold the role of chairman "last year" but declined to say when or why he had stepped down so soon after being appointed to the post.

Mr Cosslett had previously served as Fitness First's chief executive during a three-year period in which he oversaw a significant restructuring.

It was unclear on Monday whether he is spearheading Advent's interest in buying parts of Fitness First.

Once the largest chain in the UK by number of sites, the company has been through a painful financial overhaul since it was acquired by Oaktree Capital Management in 2012.

It shed dozens of struggling UK clubs through a mechanism known as a company voluntary arrangement in 2013, and revealed last year that profits in its home market had begun to improve after years of decline.

Other bidders for Fitness First's UK business, which has now got just over 70 sites, may include Bannatyne's and Mike Ashley, the billionaire tycoon who founded the Sports Direct business and who bought more than 20 sites from LA Fitness in 2014.

Fitness First also has sizeable operations in Australia and Germany and ambitious growth plans in Asian markets including Hong Kong, India, Singapore and Thailand.

In total, Fitness First has more than 370 clubs and around one million members globally.

The company, which has yet to release results for 2015, racked up combined pre-tax losses of almost £100m in the two previous years, partly because of the costs associated with its financial restructuring.

Last year, it undertook a shake-up of its management, with Mr Cosslett, its chief executive, and Oren Peleg, its chairman, swapping roles.

A spokeswoman said the company was now without a chairman.

A potential sale of its businesses in the UK and elsewhere follows a number of takeovers in the industry, with the remainder of LA Fitness swallowed up last year by Leeds-based Pure Gym – now the biggest operator in Britain by number of clubs.

The Gym Group, which operates at the value end of the market, listed on the stock market in November and has since seen its value rise from £250m to almost £345m.

Advent and Oaktree declined to comment.

Source: Skynews