A budget gym operator plans to launch 15 sites across the UK this year, after securing a £5.5m funding package from Lloyds Bank Commercial Banking.
Leeds-headquartered Xercise4Less, which was founded by former professional rugby player Jon Wright in 2006, plans to rollout 100 gyms over the next five years, creating around 4,000 jobs.
Having secured a £5m equity investment from BGF (Business Growth Fund) in 2013 to support its growth strategy, Xercise4Less now has 15 gyms, which are mainly based in the North of England, and a membership base of more than 120,000 people.
This round of funding from Lloyds Bank will enable the company to finance the next stage of its rollout plan, including a move into Scotland and the South of England, where it does not have a presence.
Mr Wright, the chief executive of Xercise4Less, said: “This further support from Lloyds Bank will enable us to accelerate the rollout of our large format budget gym offering.
“We have already handpicked locations in a number of regions throughout the UK, where we plan to launch.”
Martin Beckett, the director in the strategic finance team at Lloyds Bank Commercial Banking, said yesterday: “The budget gym sector continues to grow strongly, and Xercise4Less is well placed to capitalise on the strong demand for reasonably priced, high quality fitness facilities. This deal reinforces our belief in the management team’s growth strategy for the company, which we have supported since it began in 2006.”
Richard Taylor, the investment director at BGF in the North of England, who is also an Xercise4Less board member, added: “Having strengthened its management team with the appointment of a finance director and chairman in 2013, this important round of financing, from one of our shareholders, will help Xercise4Less to grow into other regions of the UK.
“It is a great example of how equity investment provided by BGF can also help unlock debt funding, and strengthen a company’s balance sheet for future growth.”
Legal advice for the transaction was provided by Addleshaw Goddard (Lloyds Bank), Walker Morris (Xercise4Less) and Squire Sanders (BGF).