The private equity backer of David Lloyd has reached an agreement with investors to sell its stake in the upmarket gym chain to itself after previous stalled attempts to offload the group.<\/p>\n
TDR Capital said on Monday it had closed a newly formed so-called continuation vehicle to acquire majority control of the leisure centre business from another TDR fund.<\/p>\n
The transaction values David Lloyd, which counts a gym at Clonskeagh in south Dublin among its portfolio, at about \u00a32 billion (\u20ac2.3 billion), according to a person familiar with the matter, with backers including the investment manager of Chris Hohn\u2019s Children\u2019s Investment Fund Foundation and European private markets firm CVC contributing towards about \u00a3800 million in mostly new equity.<\/p>\n
The remaining \u00a31.2 billion consisted of the gym chain\u2019s existing debt rolling into the new vehicle, the person said.<\/p>\n
The fact that most of the \u00a3800 million equity is new suggests that few investors in the original TDR fund chose to roll over their investments into the new vehicle.<\/p>\n
Continuation vehicles are funds established by private equity firms to buy one or multiple assets from other funds controlled by the same buyout group. They have become increasingly popular in recent years as the industry struggles to sell assets to other buyout firms or companies, or to list them on public markets.<\/p>\n
The Financial Times revealed this year that TDR was exploring a continuation vehicle for David Lloyd after the firm worked with bankers on potentially selling the business in 2017 and also considering a sale last year. No transaction happened on either occasion.<\/p>\n
TDR bought David Lloyd in 2013 using \u00a3190 million from its fund and \u00a3528 million in debt. By mid-2021 the buyout firm had recouped more than \u00a3550 million in dividends and other repayments, almost three times its initial investment. That was paid for in part by loading fresh debt on to David Lloyd. David Lloyd has been working on a \u201cpremiumisation\u201d of its clubs, including adding new spa retreats at existing locations. The company spent \u00a346 million on \u201cinvestment and innovation\u201d in 2023. <\/p>\n
It operates more than 130 clubs mostly in the UK with some in Europe \u2013 up from 90 when TDR acquired the group.<\/p>\n
Through the continuation vehicle TDR said \u00a3100 million had been set aside to invest in David Lloyd and support its plans to open more clubs.<\/p>\n
Tom Mitchell, managing partner at TDR, said David Lloyd had been a \u201chighly successful investment\u201d and it was \u201cexcited by the opportunities ahead for the business\u201d.<\/p>\n
Russell Barnes, chief executive of David Lloyd, welcomed TDR\u2019s continued backing and said the focus would remain \u201con investing in premium site features, including spas and facilities for fast-growing sports like padel\u201d.<\/p>\n
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