David Lloyd Leisure (DLL) has responded to comments about the change in the value of the business following its recent sale to private equity group TDR Capital. Although the terms of the deal weren’t disclosed, it’s thought DLL was sold by London & Regional and joint shareholder Caird Capital for around £750m. The sale comes six years after London & Regional joined up with HBOS to pay Whitbread £925m for DLL in June 2007.

It had already purchased Next Generation for £101.7m in May 2006. It then merged the two groups, creating a total investment value of£1.026bn. This means the TDR deal saw London and Regional taking a £276.7 hit at disposal.

DLL is keen to point out that this value difference reflects the mood of the market more than the state of the business. A spokesperson told Leisure Opportunities, “We’re obviously in a different climate for financial deals from 2007, with different multiples applying. DLL was bought by London & Regional on a EBITDA multiple of over 13 - you’d never see that today unless you were a tech company.“ To move the business on to an investor interested in putting capital into it, they’ve got the price that they have.”

David Lloyd says it has performed well over the last five years: EBITDA has improved from £77m in 2007 to £90m for the last full financial year, while the number of sites has increased from 78 in the UK and nine overseas - a total of 87 clubs in 2007 – to 81 clubs in the UK and 10 overseas with three new David Lloyd Studios, making a total of 94 sites today. Net debt has been reduced and now stands at £620m against £800m in 2007. The takeover sees TDR gain control of a chain of 94 clubs, with membership figures standing at 440,000.

In April this year, there were rumours that several investors were eyeing up the DLL business, with US-based KSL Capital Partners and Blackstone thought to be in the running. Founded in 2002, TDR holds a number of interests in the leisure industry, with investments in Center Parcs, the Stonegate Pub Company and restaurant chain PizzaExpress. “We look forward to investing capital in order to further improve the member experience and to attract new members,” said TDR founder Manjit Dale.

It’s believed TDR has identified 20 sites in the UK for expansion, as well as further opportunities abroad. There’s also talk of potential mergers and acquisitions deals, as well as the prospect of £50m to upgrade existing facilities.