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Branson buys out Virgin Active partnership to continue expansion
Sir Richard Branson’s Virgin Group has bought back the 55 per cent interest in Virgin Active that it sold to Bridgepoint Capital in 2002 – for £134.5m.
The move is part of Branson’s plans to expand the Virgin health and fitness brand worldwide, with potential targets thought to include France and India.
The group sold the stake in the health and fitness club chain to the private equity firm in February 2002, for £110m, in order to fund its expansion.
Since then, the chain has moved into the Italian and Spanish markets as well as increasing its presence in the UK and South Africa. It now operates 25 clubs in the UK, 77 in South Africa and 12 in Continental Europe, with more than 635,000 members in total worldwide.
“Bridgepoint has been a great partner,” said Branson, “growing the business with us in specific territories in Europe in the difficult climate that followed September 11.
“We now wish to take the concept to a wider global market and as part of that process offered to buy out Bridgepoint.”
It is believed that Bridgepoint had favoured an IPO, but Virgin was keen to continue its international expansion before floating the company.
For the year ending 31 December 2004, Virgin Active reported group EBITDA of £32m and has forecast EBITDA for 2005 to be in the region of £40m. Revenues for the Virgin Group as a whole exceeded £5bn in 2004.