Virgin Active confirms acquisition of Holmes Place

Health and fitness chain Virgin Active has confirmed that it has acquired rival Holmes Place in a deal which values the enlarged group at £650m.

The Holmes Place estate, which comprises 47 clubs in the UK with a membership base of 190,000, will be rebranded as Virgin Active by the end of the second quarter of 2007 and bring the total number of UK clubs to 71.

In total, the transaction will increase Virgin Active’s portfolio to 165 health and fitness clubs in the UK, Italy, Spain and South Africa and more than 900,000 members, with 324,000 members in the UK.

Matthew Bucknall and Simon Gordon, managing director and finance director respectively of Virgin Active, will continue in their roles. The group will employ more than 7,000 staff.

Bucknall said: “Virgin Active, unlike other UK health and fitness operators, has demonstrated successful growth both in the UK and Europe.

“We are actively looking to expand the group globally and already have a development pipeline of over 30 clubs in continental Europe.

“With the acquisition of the Holmes Place clubs, we intend to build on their excellent fitness reputation.

“We will rebrand the clubs as Virgin Active over the next six months, once the transaction has been approved by the OFT (Office of Fair Trading), and will also be investing £20m into the Holmes Place estate.”

Virgin Active founder Sir Richard Branson added: “Since launching in the UK in 1999, Virgin Active has revolutionised the way our members view visiting the gym.

“I am delighted to confirm today that Virgin Active has completed its purchase of Holmes Place, meaning many thousands of new members will experience fitness the Virgin Active way!”

Virgin has a majority stake in the enlarged group, with private equity groups Bridgepoint and Permira – which backed the £210m buyout and delisting of Holmes Place in May 2003 – taking a minority stake.

Bridgepoint and Permira continue as majority owners of Holmes Place’s European business, comprising a total of 15 health clubs in Germany, Austria and Switzerland

Virgin previously partnered with Bridgepoint in February 2002 to fund an expansion of the chain, before buying back Bridgepoint’s stake for £134.5m in November last year. Details: www.virginactive.co.uk