By Abigail Summerville
NEW YORK (Reuters) – Buyout agency TPG is weighing a possible sale of Crunch Health that might worth the fitness center chain at greater than $1.5 billion, together with debt, individuals acquainted with the matter instructed Reuters on Tuesday.
TPG, which acquired Crunch Health by means of its buyout arm that focuses on small and mid-sized acquisitions, is working with funding financial institution Jefferies on a sale course of that might be launched in the course of the first half of subsequent 12 months, one of many sources stated, requesting anonymity because the matter is confidential.
TPG and Jefferies declined to remark. Crunch Health didn’t instantly reply to a request for remark.
Potential acquirers of Crunch Health embrace different non-public fairness corporations, the sources stated.
Based mostly on comparable transactions within the trade, Crunch may command a valuation equal to greater than 15 instances its 12-month earnings earlier than curiosity, taxes, depreciation, and amortization of about $100 million, the sources stated.
Non-public fairness corporations have historically been prolific buyers within the health and wellness trade, as they’re drawn to the predictable money flows from subscription memberships and the chance to franchise places.
In September, consumer-focused buyout agency L Catterton struck a deal to amass pilates chain Solidcore for between $600 million and $700 million, Reuters reported. In October, Josh Harris-backed funding agency 26North Companions agreed to purchase Onelife Health.
Based in 1989, Crunch Health began out with a basement health studio in New York’s Greenwich Village. The fitness center chain, which at the moment has round 2.5 million members worldwide, operates and franchises over 460 gyms in the US, Australia, Canada, Costa Rica, Portugal, Puerto Rico, and Spain.
In 2009, health trade veterans Mark Mastrov and Jim Rowley, who led rival fitness center chain 24 Hour Health, teamed up with the non-public fairness arm of Angelo Gordon to purchase Crunch Health out of chapter.
Crunch Health competes with different fitness center chains like Planet Health (NYSE:), which listed its shares by means of an preliminary public providing in 2015, and privately-held 24 Hour Health.
TPG Development, which acquired Crunch for an undisclosed quantity in 2019, has invested in quite a few corporations throughout a number of industries, together with life sciences agency Precision Medication, cybersecurity agency Tanium, and ride-hailing app operator Uber (NYSE:).
