Low-cost gym operator Pure Gym has snapped up mid-market rival LA Fitness, picking up 43 clubs for an undisclosed sum thought to be in the range of £60-80m.
Leeds-based Pure Gym said the deal would extend the availability of affordable fitness centres to customers across Britain, particularly in London and the South East.
It will see the brand’s number of sites grow from 98 to more than 130 - after accounting for the possibility that the future of a handful may be uncertain following scrutiny by competition authorities.
Pure Gym, launched in 2009, offers affordable, non-contract 24-hour access to fitness clubs. Mid-range LA Fitness, founded in the early 1990s, represents an older model with long contracts. Most of its gyms are in and around the M25 and central London.
Most of the LA Fitness sites will be re-branded to become part of the bigger chain, subject to regulatory approval. In addition, Pure Gym said it planned to expand by adding around 30 new sites this year.
Pure Gym said it had been “working constructively” with the Competition and Markets Authority (CMA) and the transaction has been submitted for review.
Last year it abandoned plans to merge with fellow low-cost operator The Gym Group after the CMA said it would launch a full investigation.
Pure Gym chief executive Humphrey Cobbold said: “This transaction represents a good deal for members of both Pure Gym and LA Fitness as well as other consumers that are hungry for more affordable fitness options.
“Overall demand for affordable, high quality, and no-contract fitness centres is continuing to grow, served by a range of providers in a highly competitive marketplace.”
LA Fitness chief executive Martin Long said: “This transaction will give users of LA Fitness access to high-quality fitness centres through a network of existing and new gyms.
“I am confident that our facilities and members will benefit from Pure Gym’s investment and attractive proposition.”
Pure Gym was founded with two clubs in Leeds and Manchester in 2009. It now has more than 520,000 members. In 2013, private equity firm CCMP Capital Advisors bought a majority stake in the business.
LA Fitness has more than 123,000 members.
Today’s deal is the latest in the sector after Sir Richard Branson and private equity partners CVC sold a majority stake in global gym chain Virgin Active to South African investment firm Brait for £682 million last month.