Fitness First PLC - Acquisition

RNS No 3739j
FITNESS FIRST PLC
7th August 1998


FITNESS FIRST EXPANDS INTO EUROPE THROUGH THE ACQUISITION OF 50 PER CENT. OF
ONE OF GERMANY'S LEADING HEALTH CLUB OPERATORS, FITNESS COMPANY
FREIZEITANLAGEN GMBH


Highlights:

*       Fitness First plc("Fitness First"), the UK's leading health and
fitness club operator, today announces that it has acquired 50 per cent. of
the privately owned German health club operator, Fitness Company
Freizeitanlagen GmbH ("Fitness Company") and injected significant additional
capital into Fitness Company for the purposes of financing future growth.

*       The Directors of Fitness Company are warranting that Fitness Company
will generate EBITDA for the year to 31 December 1998 of at least DM3.4
million (approximately #1.17 million) which is expected to be earnings
enhancing for Fitness First.

*       The acquisition is to be funded partially through a placing of
1,643,602 new shares at 333 pence per share raising #5.47m with the balance
being financed from bank borrowings.

*       Fitness Company is a leading fitness operator in Germany with a
current portfolio of seven fitness clubs all located in Frankfurt and the
Rhein-Main area of Germany.

*       Fitness Company will be run as a joint venture between Fitness First
and Fitness Company's current owners and management.

*       The venture will provide opportunities to develop the "Affordable
Fitness" concept in Germany .

*       Fitness First currently owns 24 clubs in the UK with 3 further sites
under construction, due to open by October 1998.

Commenting on this news, Michael Balfour, Managing Director of Fitness First
said:-

"This acquisition is a particularly exciting one for Fitness First as we see
the health club market in Germany being at a stage of development similar to
that which existed in the UK at the time of our flotation in October 1996.

"Working alongside one of Germany's leading health club operators presents us
with a tremendous opportunity to build our "Affordable Fitness" concept in
Europe, which is already meeting with considerable success in the UK market."


 FITNESS FIRST PLC ("Fitness First" or the "Company")

ACQUISITION OF 50 PER CENT. OF FITNESS COMPANY FREIZEITANLANGEN GMBH 
CASH PLACING OF 1,643,602 NEW SHARES
PLACING OF 1,190,314 EXISTING ORDINARY SHARES


INTRODUCTION

Fitness First has raised #5.3 million (net of expenses) through a cash placing
(the "Placing") of 1,643,602 new ordinary shares of 25p each (the "New
Shares") at 333p per share (the "Issue Price") to partially fund the
acquisition of fifty per cent. of the existing issued share capital of Fitness
Company Freizeitanlangen GmbH ("Fitness Company"), a leading German health
club operator.  The Directors of Fitness Company are warranting that Fitness
Company will generate EBITDA for the 12 months to 31 December 1998 of at least
DM3.4 million (approximately #1.17 million).

Fitness Company will be run as a joint venture between Fitness First and
Fitness Company's current owners and management.

In addition, Michael Balfour, Managing Director of the Company, and
Christopher Pearce, Chairman of the Company, have today each disposed of
595,157 ordinary shares of 25p each in Fitness First, at the Issue Price.

THE PLACING

The Company has today made arrangements for a placement of 1,643,602 New
Shares by way of a cash placing at 333p.  Since the issue of the New Shares is
within the existing Section 95 Authority, shareholder approval is not required
for the Placing.  The placing, which has been co-ordinated by Henderson
Crosthwaite Institutional Brokers, is on a reasonable endeavours basis.

Dealings in the New Shares are expected to commence on Friday, 14 August 1998.

The New Shares rank pari passu with the existing ordinary shares of the
Company.

INFORMATION ON FITNESS FIRST

In October 1996, the Company raised #7.54 million and was floated on AIM. 
Fitness First has pioneered the "Affordable Fitness" concept by providing
quality health and fitness clubs at an affordable price.  At the time of the
flotation, the directors of Fitness First (the "Directors") indicated that it
was the Company's intention to open between six and eight new Fitness First
health clubs each year.  Since the flotation 18 new health clubs have been
opened.  A further three clubs are due to be opened by October 1998, taking
the total number of Fitness First health clubs in the UK to 27.  This
substantially exceeds the Company's original target of 25 clubs by October
1999.

In December 1997, the Company concluded a joint venture with The Berkeley
Group PLC which will enable it, subject to the availability of suitable
leasehold sites, to open an additional ten to fifteen Fitness First health
clubs over the next three years in prime areas of London and the South East
where the Company does not have significant presence.

In February 1998, the Company raised #10.1 million, through a placing and open
offer at 217p per share, to continue its on-going UK opening programme and to
make commitments for new sites well into 1999 and beyond.

INFORMATION ON FITNESS COMPANY AND THE GERMAN HEALTH CLUB MARKET

Fitness Company is a leading health club operator in Germany.  Fitness Company
has built up a portfolio of six health clubs, with a seventh club due to open
in November 1998, all located in the Frankfurt and Rhein-Main area of Germany.

Fitness Company is owned by its management, James McGoldrick and Marcel
Franke, and their families (collectively the "Vendors"). 

Fitness Company had EBITDA of DM 2.5 million (approximately #0.87 million) for
the 12 months ended 31 December 1997 and net assets at that date of DM 673,000
million (approximately #232,870).

Fitness Company's strategy will be to expand its "Affordable Fitness" concept
into other German cities.  The new clubs, which will be created primarily by
the leasing of new sights but also by the acquisition and refurbishment of
existing heath clubs, which will be modelled on Fitness Company's 'Dreieich'
club, opened May 1998, which was itself modelled on the Fitness First layout.

Germany has 5,500 private health clubs (UK:2,200) however only 150 of these
have square footage in excess of 15,000 sq ft (UK:200).  (Source: Mintel &
Deutscher Sportstudio Verband)

It is estimated that 4.5 per cent of the German population holds a health club
membership (UK: 5 per cent).  (Source: Mintel & Deutscher Sportstudio
Verband).

The Directors believe that the German health club market is in a similar state
to that which existed in the UK at the time of the Company's flotation.  The
market is fragmented and dominated by smaller, poorer quality clubs.  The
Directors believe that health clubs are not yet a lifestyle concept in Germany
to the extent that they currently are in the UK.  They believe that this will
change in the future.

The Directors believe that an opportunity exists to replicate the "Affordable
Fitness" concept in Europe and that the opportunity will be best exploited by
the formation of a joint venture with a profitable, experienced local partner
operating in the "affordable" health club sector.
 THE ACQUISITION

The Company has, subject to the completion of this financing, acquired fifty
per cent. of the existing shares in Fitness Company, and injected significant
additional capital into Fitness Company for future expansion, for a total
consideration of DM28 million (approximately #9.67 million).  The
consideration will be partially satisfied by the issue of 400,000 new ordinary
shares in Fitness First of 25p each at 320p per share.  The remainder of the
consideration will be satisfied in cash.

The Vendors have warranted EBITDA of a minimum of DM 3.4 million
(approximately #1.18 million) for Fitness Company for the 12 months ending 31
December 1998. 

Following the acquisition and injection of new funds into Fitness Company,
Fitness Company will be run as a joint venture between Fitness First and the
Vendors.  

Fitness First will account for Fitness Company as an associate.

James McGoldrick and Marcel Franke will remain as managing directors of
Fitness Company.

The shareholders agreement sets out the parameters within which Fitness
Company will be run and material business decisions and any amendments to the
shareholders agreement will require the approval of at least 75 per cent of
the shareholders of Fitness Company.

CURRENT TRADING AND FUTURE PROSPECTS

Following the announcement of the Company's interim results on 29 June 1998
the Company is able to report the continuation of its strong growth record
with the opening of its Brixton club and the acquisition of a club in Camden. 
This underpins the statement made in the Company's interim announcement that
"the Group is particularly well positioned to continue the rapid expansion of
the "Affordable Fitness" formula and to capitalise on the large demand for
facilities in the fast growing UK health and fitness market."

It is expected that the creation of the joint venture in Germany and the
introduction of the highly experienced and able management team that already
exists in the Fitness Company will further enable Fitness First to maintain
the development of its concept over a broader market, well into the future. 
The acquisition is expected to be earnings enhancing immediately following the
completion of the transaction.

PLACING OF DIRECTORS' SHARES

In addition to the Placing, Michael Balfour, Managing Director of the Company,
and Christopher Pearce, Chairman of the Company, have each disposed of 595,157
ordinary shares of 25p each in Fitness First, at the Issue Price.  They have
stated that it is not their intention to sell any further shares for a period
of at least one year following the date of this announcement.

Following the disposal Michael Balfour and Christopher Pearce will each hold
4,000,000 ordinary shares of 25p each, representing 11.5 per cent. each of the
enlarged issued share capital of the Company.

The decision to sell shares which represents approximately 13.0 per cent. of
their combined shareholding in Fitness First is the first occasion that the
directors have disposed of shares and leaves them, in aggregate, with
8,000,000 shares, approximately 87.0 per cent. of their original shareholding
in the Company.


Notes to editors:-

1.       Fitness First was floated on the Alternative Investment Market in
October 1996 at a price of 80 pence per share.  At the closing share price on
6 August 1998 of  347.5p the Group has a market capitalisation of #114.9
million.

2.       Founded in 1992, Fitness First was created with the objective of
developing a chain of health and fitness clubs to focus on the concept of 
'Affordable Fitness', providing health and fitness club facilities that tend
to be in most demand for a relatively modest annual subscription fee of around
#31 per month and a joining fee of typically #60.

3.       A typical Fitness First health club, with a fit out costing between
#700,000 and #800,000, provides a large gymnasium with a wide variety of
cardiovascular and resistance equipment, a large air conditioned aerobics
studio and luxury changing facilities leading on to a health spa consisting of
a large sauna, steam room and whirlpool bath.  Also provided are extensive
free parking, creche, lounge area with licensed bar, beauty salon and an
extensive members' complimentary video library consisting of over 300 titles.

4.       Clubs currently open, by location:

Birmingham, Bournemouth, Brixton, Bromborough, Camberley, Camden, Chatham,
Chelmsford, Coventry, Derby, Dundee, Edinburgh, Fareham, Glasgow, Halifax,
Hartlepool, Huddersfield, Ipswich, Kilburn, Northampton, Rotherham,
Shrewsbury, Southampton & Southend.

The following 3 clubs are currently under construction and are due to open by
October 1998:

Kingsbury, Regents Park & Telford
 
For further information please contact:

Michael Balfour                   Fitness First plc         01202 390444
Christopher Pearce                Fitness First plc         01932 865065
Andrew Edwards                    Henderson Crosthwaite     0171 623 9333
Adrian Shaw                       Gavin Anderson            0171 457 2345




END

ACQUBUPARBGRPGQ
Foresight Enterprise Vct (LSE:FTF)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024