£150m capital injection agreed for Pure Gym

Leeds-based PureGym, a major UK and European gym operator, says its shareholders, Leonard Green Partners, have agreed to contribute £100m in additional cash to the business.

The business has also agreed with certain lenders to increase commitments under its Revolving Credit Facility by £50m.

This increases the total available borrowings under the Revolving Credit Facility from £95m to £145m.

In aggregate, this transaction increases total liquidity for the business to £297m as at June 30, 2020, on a pro forma basis.

A spokesman for PureGym explained: “As reported in our Q2 results, while Q2 performance was significantly impacted by COVID-19 closures, swift management action protected liquidity and cashflow during lockdown when, for a period, the whole estate was closed.

“Reopening our gym estate has been successful with positive member feedback, which has translated to encouraging member trends in like for like member volumes as well as gym visits.

“Our shareholders remain highly supportive of our business and optimistic about its long-term prospects.

“The Equity Injection by our shareholders and the increased commitment under the Revolving Credit Facility are intended to bolster our balance sheet, facilitate our return to a growth strategy focused on developing and opening new gym sites when the right opportunities arise and provide a cash buffer in the event local or national lockdown measures are re-imposed.”

Humphrey Cobbold, chief executive officer of PureGym, said: “The COVID-19 lockdown resulted in the closure of our estate for an extended period, forcing us to operate under an almost unthinkable scenario of near zero revenues.

“In circumstances that might have forced many businesses to go bankrupt, the team across the UK and Europe did an outstanding job of preserving cash, re-fitting the gyms to be safe and then re-opening the estate.

“We are delighted with the member response to our TrainSafe protocols in the UK and equivalent COVID-19-safe arrangements across Europe.

“We are now welcoming our members back to our gyms and are intent on re-earning their trust.

“This additional £150m of new capital boosts the total liquidity to which the business has access to £297m (on a pro forma basis as of June 30th) and will act as a substantial buffer to both handle any further enforced closures and continue our expansion.

“Health and wellbeing have never been more important, and our scale and affordable, accessible proposition position us well to improve the health of people in all the countries where we operate.”

Kris Galashan, Partner at Leonard Green Partners, said: “The management team at PureGym did an outstanding job guiding the business through unprecedented market conditions.

“This journey has underscored the business’s ability to withstand an extreme market shock.

“The PureGym Group is emerging as one of a handful of fitness businesses with global reach, sophisticated technology and yield management capability.

“The pandemic has reinforced the trend to health and the PureGym Group is excellently placed to provide facilities and services that benefit members and, in turn, societies.

“We are proud to be increasing our investment and playing our part at this challenging time and we look forward to supporting the business through its ongoing growth and expansion.”