After sweeping across Canberra and the eastern states of Australia, health and fitness leader Viva Leisure’s rapid rise continues apace – this time across the world.
Viva Leisure is acquiring Australian Fitness Management Pty Ltd, which operates as master franchisor of Plus Fitness health clubs at 197 locations across Australia, New Zealand and India. AFM’s Australian presence comprises 190 centres, including in Western Australia and South Australia. In New Zealand it has three locations and another four in India.
Viva Leisure’s Chief Executive and Managing Director Harry Konstantinou said: “The acquisition of the Plus Fitness brand, systems and master franchisor, including the master franchise licence for New Zealand, and a first right of refusal on the existing 197 locations makes this the most exciting and largest opportunity in our history. It expands on and continues to cement Viva Leisure’s position as a leading and fast-growing health club owner and operator in the Australian market.”
Having annual revenue of more than $100 million, the AFM acquisition will complement Viva Leisure’s target market, while realising further revenue growth and operating synergies for both organisations. They each have high-quality operations which ensure integration simplicity, transaction metrics and funding.
Viva Leisure will overlay its proven hub-and-spoke model approach across the new network with existing brands such as hiit republic. The expanded operation will engage with its suppliers to achieve economies of scale across approximately 280 clubs and roll out IT systems providing operational and financial benefits to the company and the franchisees.
“Our data tells us that in every market, proximity, location and accessibility matter,” Mr Konstantinou says. “With an increased network and reach, Viva Leisure will grow its significant market share,” he says.
Chief Financial Officer Kym Gallagher adds: “This transaction buys Viva Leisure a pipeline of future acquisitions while diversifying our revenue stream and providing another option for roll-outs.”
The transaction is expected to complete by 31 August 2020.
Viva Leisure will retain the services of the AFM founders John Fuller and Nigel Miller, further smoothing the integration and growing the Plus brand.
By combining their resources the two health and fitness operators become a powerful entity in the industry. Viva Leisure is a pace-setter in the boutique, express 24/7, standard and big-box segments with 95,000 members. Launching in 2009, Plus Fitness operates in the express 24/7 segment and has 175,000 members.
The combined group of Viva Leisure’s existing clubs and the acquired AFM business will make it the fourth largest group in Australia by number of clubs and third largest group by members. About 25 employees will join the Viva Leisure team, bringing the combined group to over 1000 staff.
Viva leisure launched in 2004 with a clear mission – to connect health and fitness with as many people as possible. From there it began replacing expensive traditional fitness outlets with affordable options with no joining fees or contracts. Combining with Plus Fitness, it has taken on an outstanding operator and offers members a history of 16 years of innovation.
Post the acquisition, the composition of Viva Leisure’s members by geographic location will reflect the continuing diversification and reduced reliance on the ACT membership since it listed on the Australian Stock Exchange in June 2019.