The parent company of Plus Fitness, Canberra-based Viva Leisure, has announced a strategic acquisition, buying a 25 per cent stake in World Gym Australia for $16.7 million. This has been Viva’s second biggest acquisition to date and reinforces the company’s position in the Australian fitness market. As part of the deal, Viva will also assume three corporate World Gym locations in Queensland, at Stafford, Coomera, and Underwood, which the company considers important to increasing its presence in the state.
The deal, a 50-50 joint venture with World Gym Australia founders Mike Nysten and Jon Davie, will see Viva Leisure further invest in World Gym by opening additional corporate locations. Additionally, Viva holds a call option to acquire the remaining 75 percent of World Gym Australia within the next three years. This move is expected to significantly enhance the company’s national fitness network, positioning it as the largest and most diversified in Australia.
Viva Leisure CEO Harry Konstantinou highlighted the scale of the deal as Viva’s existing network is now set to reach over 583 sites. The membership count will go past 587,000, and with World Gym’s complementing 169,000 members, the opportunities for growth and revenue scaling are enormous. Konstantinou also mentioned Viva’s success in consolidating Plus Fitness, adding 190 clubs to its roster in 2020. She expressed further confidence that this success can be mirrored with World Gym Australia.
World Gym Australia, with 53 locations across the country, has had a rapid growth story since its inception in 2006. The tie-up with Viva will only fuel the fire, leveraging Viva’s technology, operational support, and business systems. Nysten and Davie, who brought the California-based World Gym brand to Australia, are ecstatic about the prospects of the brand in Australia, planning to make it the number one large-format full-service gym network in the country.
The $16.7 million acquisition is funded using Viva’s cash on hand, debt facilities, and up to $1 million shares. The transaction is expected to be finalized in the third quarter of FY25. Viva has predicted annualized revenue to surge more than $224 million in FY25 from $163.6 million in FY24. The acquisition, which is expected to generate annual earnings of approximately $4 million, with further improvements expected through synergies between the corporate clubs and the franchisee network, has been valued at 4.1 times EBITDA. Viva Leisure shares saw a rise in trading, up 8.5 cents to $1.415 as of midday (AEDT) on 10 December 2024.
