Holmes Place, the upmarket UK health club operator which has been the subject of speculation of a private equity-backed buyout in recent months, has announced that it is to pursue an offer from privately-held health club operator Cannons. The announcement came as Holmes Place announced flat pre-tax profits of £6.7m for the first half of 2002, despite a 28 per cent increase in turnover.
The 200 pence per share offer from Cannons, which itself was the subject of a private equity-backed takeover led by Royal Bank Private Equity last year, values Holmes Place at £205m. The offer is at a 14 per cent premium to the 175 pence indicative offer mooted by a team comprising chief executive Allan Fisher and Bridgepoint Capital in July. Holmes Place is currently trading at 187 pence per share.
Holmes Place operates around 50 clubs in the UK with a further 17 based in Continental Europe. The business increased its subscriber base by 14 per cent in the period, and now counts 260,000 members. Cannons currently operates around 35 fitness clubs across the UK.
Health and fitness has been an active sector for private equity during the past 18 months. Royal Bank Private Equity led the way with its acquisition of Cannons in May 2001. Since then, Bridgepoint Capital, Duke Street Capital and Nordic Capital have all completed sizeable deals in the sector, the most recent of which was the acquisition of Nordic of the Scandinavian operations of 24 Hour Fitness Worldwide for an undisclosed price.