Mergers to spawn gym giant

PRIVATE equity investor Quadrant is set to launch Australia’s biggest health and fitness company after the offmarket purchase of Fitness First Australia for an estimated $280 million.

Quadrant has acquired Jetts Fitness, Goodlife Health Clubs and Hypoxi over the past two months.

The companies will be merged in to a new vehicle to be called Fitness and Lifestyle Group at an estimated value of more than $650 million.

Quadrant may seek other investors. However, Fitness First owner Oaktree Capital and Jetts Fitness vendors have agreed to take equity stakes.

The merged vehicle is estimated to have more than 650,000 members, 365 gyms and 188 franchises.

US equity fund Oaktree decided to offload the Australian operations of Fitness First having recently carved out the company’s main UK operations.

Oaktree gained control of Fitness First in 2012 after its British parent came under financial pressure.