Though Virgin Active was founded and is headquartered in the UK, it’s actually South Africa where the largest number of its health clubs is located. That’s probably one of the reasons a majority stake in the chain has been snapped up by the Safie private equity firm Brait, which is majority owned by multi-billionaire entrepreneur Christo Wiese.
The investors will take on the entire 51% stake acquired by CVC in 2011 and most of the remaining shares held by Sir Richard Branson’s Virgin Group. Brait will pay £682m for a total stake of 80%, in a deal that gives the chain an enterprise value of £1.3bn.
‘Virgin Active is a business that we are proud to have been associated with from the very beginning, over fifteen years’ ago,’ Branson said. ‘We are delighted that we will continue to play a part in this alongside Brait, another long term investor with a strong track record in growing businesses, and would like to thank CVC for their support of the business during their period of ownership.’
While CVC was always going to be looking for a profitable sale, it’s not totally clear why Virgin wanted to cut its stake. It could be the result of increasing competition – while Virgin Active claims to be the biggest UK gym chain by value, it’s under siege from increasing competition from budget providers like Gym Group and Pure Gym, which offer a slimmed-down service for a substantially cheaper price.
Wiese, who made his fortune expanding the supermarket chain Shoprite is no stranger to Britain. Brait also has a minority stake in Iceland and Wiese is currently working on the launch of a new fashion chain Pep&Co with former Asda boss Andy Bond.