£300m equity investment to help energise PureGym

Leeds-based gym operator, PureGym, has raised £300m worth of equity cash to fund its expansion, with global investment firm KKR to become a significant minority investor.

Leonard Green & Partners (LGP), will retain a majority ownership position in the business.

The PureGym Group reported strong quarter three results to bond investors in November, with revenue ahead of the equivalent period in 2019 and profits bouncing back from the challenges of the pandemic.

Its brand is now fully established in 40 sites in Switzerland and in Saudi Arabia where the first of many planned franchise sites are already open and trading. It will also soon be in the US in three trial sites.

PureGym says it believes conditions are now right for significant further development of the business.

Combined with existing resources and credit lines, the group will have access to approaching £500m of capital after the completion of this investment from KKR.

This capital should enable continued growth through the opening of more sites both in the group’s current markets, as well as to sustain continued international expansion over the coming years.

PureGym adds it will also deploy significant capital to strengthen its existing gym network, and maintain and enhance its technology platform.

Humphrey Cobbold, chief executive officer, said: “We are simply delighted to welcome today an investment firm of KKR’s stature – a firm I have known and respected for many years – as our new strategic partner.

“To have investors of the calibre of KKR and LGP supporting our business is a testament to the extraordinary efforts of every single colleague across our enterprise.

“It is also an endorsement of our overall strategy which is to become one of the leading players in the rapidly developing world market for gyms, fitness and activity.

“We have a clear and deliverable growth strategy to ensure we deliver on this mission.

“We aim to expand further and consolidate our leadership positions in the UK, Switzerland and Denmark.

“Beyond Europe we have established a ground-breaking franchise partnership in the Middle East, exciting early-stage discussions with potential franchise partners in Asia, three trial sites preparing for launch in the US, and an exciting digital fitness development plan.”

Blaine MacDougald, partner and co-head of KKR’s Strategic Investments Group, said: “We have followed PureGym closely over the last few years as it emerged as an outstanding performer in its sector, with an experienced management team well-positioned to take advantage of the global opportunity in health and well-being.

“This investment provides PureGym with flexible capital to support its growth and international expansion plans and we will draw on the full range of KKR’s global platform and operational resources to help them drive further success for the business.”

Kris Galashan, Partner at LGP, added: “Today’s capital raising represents a significant development in the company’s journey.

“We are delighted to be working alongside KKR, one of the world’s leading investment firms, and look forward to working with them and the management team to secure further growth and success.”

KKR has been investing in the UK since its London office opened in 1998, with a long track record of helping UK-based businesses grow and internationalise.

Closing of the PureGym investment remains subject to the satisfaction of customary conditions.