TPG Weighs Selling Crunch Fitness With A Possible $1.5 Billion Price Tag

What’s going on here?

TPG is considering selling Crunch Fitness for over $1.5 billion, with Jefferies expected to start the sale process in early 2025.

What does this mean?

The sale could mark a significant deal for the fitness sector, drawing interest from private equity contenders eyeing Crunch, which boasts a valuation exceeding 15 times its $100 million EBITDA. Since its inception in 1989, Crunch Fitness has expanded to over 460 gyms worldwide, including regions like the US, Australia, and Spain, serving 2.5 million members. This impressive growth appeals to private equity firms eager to tap into steady revenue from memberships and franchising, as evidenced by deals like L Catterton’s acquisition of Solidcore.

Why should I care?

For markets: Fitness industry flexes its muscles.

The sale of Crunch Fitness underscores increasing interest in gym chains by private equity firms, drawn by the stable revenue streams of membership models. The high valuation indicates that institutions are ready to pay a premium for established networks with global reach. Market participants should anticipate further consolidation as firms like 26North Partners make significant moves.

The bigger picture: The gym boom continues.

The fitness sector’s allure stays strong, spurred by a pandemic-fueled focus on health and wellness. TPG Growth and others investing in areas like Precision Medicine reflect a broader strategy of capitalizing on demographic shifts towards healthier lifestyles. This direction suggests enduring growth opportunities not only for gym businesses but also for health-focused industries globally.