Representatives at David Lloyd have been in a positive mood since the sale of the business to TDR Capital. Despite a drop in value, a strong EBITDA performance has buoyed confidence at the the premium health and racquets operator.
TDR have a good track record in leisure with Stonegate, Centerparcs and Pizzaexpress in their portfolio but industry insiders have speculated that a change at the top is what’s required at DLL to ensure the business stays at the forefront of the leisure industry.
It’s probably come as a relief for many though, that the operator hasn’t been snapped up by one of it’s rivals in an ever shrinking premium marketplace.
Since our last post about a potential takeover bid by Virgin Active for the David Lloyd chain, we decided to investigate how this move would be received by those working in the sector.
We asked for some input across our Linkedin, Facebook and Twitter pages and it’s fair to say we had a pretty mixed reaction.
Initially, there were a couple of prominent viewpoints which seemed to be raised quite regularly:
Firstly, that such a large monopoly in such a small sector wouldn’t be ideal as they would start to dictate pricing, and salaries.
Secondly, and more positively, that any deal of this size, would create substantial movement of staff across the sector, thus creating more job opportunities for all.
Thirdly, that the move would be positive for budget and mid market operators who feel they can compete with the service being delivered by the likes of VA.
We also spoke to employees of the parties concerned and again there were mixed feelings. Whilst most were excited about the new opportunities and investment the deal would bring, they were also concerned about the probably gulf in salaries and whether they would be kept on by their new owners.
We’ll keep you posted!
Two of the biggest brands in the health and fitness market are gearing up for a merger. As reported last week, premium health club operator David Lloyd Leisure have been courting the interests of several investors who could save the debt ridden-business.
It’s now become apparent, in one of the worst-kept secrets in the sector, that rival chain Virgin Active are eyeing a potential takeover bid. The deal would create a £2bn health and fitness empire, although any potential merger is likely to be subject to approval by the monopolies commission.
The big question for industry insiders is: What effect does this have on our industry? Some will be concerned about the diminishing choice of large employers within the industry and that the lack of competition will have a negative impact on salaries. There’s certainly been a trend for senior managers to leave the industry when major takeovers occur and the losses were substantial with the demise of Holmes Place and Esporta.
However, VA may have competition from an unlikely source over the next couple of years as Fitness First rises from the flames of their CVA agreement with a concerted departure from the budget end of the market.
Original article available from skynews.com http://news.sky.com/story/1080502/virgin-active-eyes-2bn-david-lloyd-merger
It’s a rumour that’s been around for quite some time but there’s now some more concrete evidence that the sale of the premium health club chain could be imminent. Lot’s of interest from private equity firms reported but industry insiders are hedging their bets speculating that they could be key acquisition for one of their rivals.
“KSL Capital Partners is reportedly looking to purchase gym chain David Lloyd, thought to be worth around £900m.
The Sunday Times said the US-based private equity firm, which recently bought UK hotel chains Malmaison and Hotel du Vin, is one of several potential buyers with US investment house Blackstone also thought to be mulling a bid.
The Hatfield-based gym group has 80 clubs across the UK and is named after former English tennis professional David Lloyd, who founded the business in 1980.
It has a focus on racquet sports with around 700 tennis courts, 180 badminton courts and 140 squash courts.
It has around 450,000 members and employs 6,000 staff.”
Source: Health Club Management