Graphite backs £22m fitness club buyout

Graphite Capital has invested in a £22 million management buyout of fitness business The Third Space Group.

UK mid-market buyout firm Graphite Capital has backed the £22 million (€32 million; $45 million) management buyout of UK health and fitness club The Third Space Group.

The business currently operates one health and fitness club in Central London, but it aims to develop more clubs and explore acquisition opportunities both in London and in other big cities. It operates at the premium end of the market – in addition to standard gym facilities, the club also has a medical centre, a climbing wall and even a hypoxic chamber.

Andy Gray, senior partner at Graphite, said: “The Third Space has excellent opportunities for expansion. We have considerable experience in growing leisure and consumer businesses to multi-site operations.”

Graphite has made a number of investments in the leisure and consumer sectors, including tour operator Park Holidays, budget hotel developer Golden Tulip and noodle bar chain Wagamama.

It has also been active in the related healthcare area – in June it sold retirement home operator Avery Healthcare to Southern Cross Healthcare Group for £96.5 million, generating a return of 2.7 times the firm’s original investment.

Former finance director Eric Dunmore will become chief executive of The Third Space. The company is also looking to recruit a chairman.

Graphite manages more than £1.2 billion through three private equity funds and one quoted fund, Graphite Enterprise Trust. The firm raised £475 million in May for its latest fund, Graphite Capital Partners VII, along with an £80 million co-investment vehicle to provide extra firepower for bigger deals.