London, 13 June 2013 – Bridges Ventures (“Bridges”) has today announced that it has sold its majority position in The Gym Group (‘”The Gym”) to Phoenix Equity Partners, its fourth successful realisation in the last twelve months.

The transaction represents a 50% IRR and 3.7x multiple for investors in Bridges funds, of which a minority was rolled over to retain a 25% stake in The Gym going forward, enabling Bridges investors to benefit from the future growth in the business.  The Gym operates from 36 sites nationwide, with plans to open 20 to 30 new gyms per year.

The Gym pioneered the concept of low-cost gyms in the UK, opening its first site in Hounslow in 2008 and has been a flagship investment for Bridges for over 5 years. It provides state-of-the-art fitness facilities in purpose-built gyms which are open 24 hours and located mainly in underserved areas, offering flexible memberships from as little as £10.99 per month.

Bridges, along with The Gym’s CEO John Treharne, incubated the idea from concept stage and provided the initial finance for the fit-out of sites through the Bridges Sustainable Growth Fund – an impact-driven fund that invests in businesses that can deliver both strong commercial returns and positive social impact. The Gym has also delivered against Bridges’ social impact objectives.  It has brought accessibility and affordability to the health and well-being sector and addressed an important social need amongst traditionally excluded groups. Today over 50% of the gyms are located in underserved areas, with over 30% of its 200,000 members being first-time gym-goers. In addition, the company has positively contributed to boosting local economies by driving employment and supply spend in underserved areas.

Following the injection of capital, The Gym’s management team will stay in place, focused on continuing to drive the future growth of the business.
Philip Newborough, Managing Partner & Co-Founder, and Anne-Marie Harris, Partner, at Bridges Ventures, have enjoyed a close working relationship with the management team and have been instrumental to the company’s success.

Philip Newborough, Managing Partner & Co-Founder at Bridges Ventures, will remain on the board.  He said today: “Since the opening of the first site five years ago we have been working very closely with John and his team in building a business that has delivered on both its commercial and social impact goals. The company is now entering a new phase of development and we are delighted it has been able to raise the capital needed to fulfil its ambitious expansion plans.  We are looking forward to continuing to work with the management team and Phoenix Equity Partners in this next exciting phase.”

John Treharne, CEO of The Gym: “We are delighted to have Phoenix Equity Partners in tandem with Bridges Ventures  to help take The Gym Group through its  next exciting stage of development, continuing its fast rollout programme and to develop still further its innovative and technology driven focus in the affordable gym sector. We are pleased that Bridges Ventures will be retaining a significant stake in the business. They have been wholly supportive to me and our management team since the business’s inception in 2007 and together, in a true partnership, we have created the new genre of health and fitness clubs, which are fit for today’s needs and economic climate. We look forward to continued success together and to driving further change and development in the sector.”

David Burns, a Partner at Phoenix, added: “John and the management at The Gym have created a very successful model in this fast-growing sector and we look forward to investing further capital to help them take the business to the next level.”

The Gym’s success and rapid growth have been recognised by numerous awards and prestigious industry rankings.  The Gym  was named as one of the UK’s fastest-growing companies in the latest Sunday Times ‘Fast Track 100’ ranking,  followed by an inclusion in the newspaper’s ‘Best 100 Small Companies to Work For’  list which gave the company a Three Star Accreditation for being an “extraordinary employer”.  As recently as last month, John Treharne received a “CEO of the Year” regional award at the BVCA Management Team Awards. -ends-

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Notes to Editors

Bridges Ventures (www.bridgesventures.com) Bridges Ventures LLP (“Bridges Ventures”) is a specialist fund manager dedicated to using an impact-driven investment approach to create superior returns for both investors and society at large. Bridges Ventures has raised six funds to date which total almost £300m: Sustainable Growth Funds I, II and III, the Bridges Sustainable Property Fund, the CarePlaces Fund, the Bridges Social Entrepreneurs Fund and the Bridges Social Impact Bond Fund.

The Gym Limited (www.thegymgroup.com) The Gym Group is the market leading, award winning, fast growing operator of low cost gyms. The Gym Group currently operates 36 sites nationwide, spanning Glasgow to Swansea and Brighton, with a high density of units in London and the South East.   It has a strong pipeline of new sites and is accelerating its rollout programme to 20 -30 per annum.

The Gym Group pioneered the innovative, technology driven, 24/7, low cost, “no frills”, gym model. With low start-up fees and no contracts, the Group is one of the best value offers in the market with state-of-the-art gym equipment and high quality sites.

The Gym Group has won many accolades including being 13th in the Sunday Times Fast Track 100 and 15th in its Best Small Companies to work for as well as the winner of Budget Gym of the Year Award.

The Group is led by John Treharne, Chief Executive, who played squash for England and was founder of Dragons Health & Fitness.

Phoenix Equity Partners (www.phoenix-equity.com) Phoenix is an independent private equity fund management business. Phoenix is owned by its executive team. Phoenix’s investment focus is on mid-market UK private businesses valued at up to £200 million and has extensive experience of supporting roll-out strategies.

People Bridges Ventures: Philip Newborough, Anne-Marie Harris, Ian Taylor The Gym:  John Treharne (CEO), Andrew Mathews (FD), Jeremy Phillips (Property Director), Paul Gilbert (Chairman)
Advisers to The Gym Corporate Finance – McQueen (George Fleet, Simon Croft-Baker) Legal Advisors – Addleshaw Goddard (Mike Hinchliffe) Due diligence – PwC (David Trunkfield; CDD), KPMG (Philip Abram; VDD) Management Advisor – Wyvern Partners (Martin Kitcatt)

Advisers to Phoenix Legal Advisors – Eversheds (James Trevis), Travers Smith (Russell Warren; Tax) Due diligence – Ernst & Young (Cary Wilson; FDD), Intuitus (Ian Mackay; IT) Debt Advisor – Lincoln International (Jonathan Broome) Corporate Finance – DC Advisory (Henry Wells)

Debt Providers Proventus and HSBC