Conn. firm acquires Planet Fitness franchisee
STAMFORD — Olympus Partners has acquired a Planet Fitness franchisee for more than $675 million, highlighting one of the busiest-ever periods for the Stamford private equity firm.
The acquisition of Austin, Texas-based Excel Fitness Holdings increases the number of companies to 13 in Olympus’ portfolio. Excel serves nearly 750,000 Planet Fitness members across more than 90 locations that it operates in Austin; Dallas-Fort Worth; Raleigh-Durham, N.C.; Tulsa, Okla.; northwest Arkansas; and across Virginia. Supported by Olympus, it aims to run more than 100 locations by the end of 2022.
The deal comes as other companies in Olympus’ portfolio are thriving. Olympus officials said their firm has returned a total of approximately $1.5 billion in dividends and sale proceeds to about 40 institutional investors in the past eight months — an Olympus-record distribution to investors in a one-year period.
“We’re pretty happy with the state of the portfolio and how our companies are doing,” Olympus founder and managing partner Rob Morris said in an interview. “In the case of the Excel Fitness acquisition, of the various health clubs and gymnasiums that are national franchises, Planet Fitness seems to have been the most resilient with respect to COVID. We think we can continue to build out that model in geographies adjacent to existing locations.”
Among other recent deals, Olympus announced in March the acquisition for approximately $450 million of Irving, Texasbased Omega Environmental Technologies, a distributor of automotive air-conditioning products.
“They have an excellent market position with distribution of components needed to repair or rebuild air-conditioning systems in cars. These guys supply everybody,” Morris said. “And it’s also an excellent platform, which we can use to buy other companies to build onto this management team to supply similar kinds of items in the after-market.”
Last September, Olympus sold pet-products provider Petmate for nearly $700 million. Of that total, it distributed about $400 million to investors.
Producing 10-figure dividends
Amid the recent acquisitions, Olympus officials said many of the companies in Olympus’ portfolio have been performing strongly in the past year.
Among the top performers are Soliant, a provider of health care and education staffing services; Tank Holding, a manufacturer of polyethylene tanks and containers; and Vaco, a provider of business consulting and talent services.
Based on those three firms’ rising earnings, Olympus officials said their firm has distributed about $1.1 billion in dividends to investors in the past few months.
“When we buy companies, we try to buy ones that are able to do reasonably well, even in adverse conditions such as COVID,” Morris said. “That happened here, so we were delighted to distribute $1.5 billion worth of profits (dividends, combined with proceeds from the Petmate sale), on the heels of a huge economic softening caused by COVID.”
Olympus manages funds totaling more than $8.5 billion, mainly on behalf of corporate pension funds, endowment funds and state-sponsored retirement programs.
Several investors contacted by Hearst Connecticut Media declined to disclose how much they received from Olympus’ recent dividend distribution, but said they were satisfied with their share of the proceeds and pleased with Olympus’ performance.
“They have a very stable team, and their performance is as good as we would have expected,” said John Kyles, a managing director at Darien-based Portfolio Advisors, a middle-market private asset management specialist with about $38 billion in assets under management.
Other investors include London-based Wellcome Trust, one of the world’s largest charitable foundations and health research funders, supported by an endowment of around $50 billion. Wellcome has more than $100 million invested with Olympus, and it has been an investor with the firm for more than 20 years.
“Olympus is one of our oldest relationships, which testifies to their success,” said Robert Coke, Wellcome’s managing director of private equity. “They have often taken on complex and challenged businesses and turned them into growing and attractive businesses that have delivered good returns for shareholders and created jobs.”
Morris said he was confident about Olympus’ future, despite the volatility in the global economy. The firm’s offices are in the Metro Center complex, at 1 Station Place, across the street from the downtown Stamford MetroNorth Railroad station. It has about two-dozen employees.
“The big things that we worry about and are having to act on regularly have to do with inflationary pressures. There are tremendous rises in commodity inputs in every business, such as resin for making plastics and the price of sugar in the baked-goods industry,” Morris said. “But overall, our portfolio is faring well — so we’re happy.”