Viva Leisure is investing $2m for a 34 per cent stake in Boutique Fitness Studios which operates US brands Club Pilates, CycleBar, Rumble Boxing and StretchLab.
The binding agreement gives Viva Leisure the largest shareholding in Boutique Fitness Studios and a seat on the board.
The deal also includes an option to acquire the rest of Boutique Fitness Studios (BFS) for $5.8 million plus a potential earn-out based on net studios opened and sold.
The investment in BFS is fully funded from existing cash reserves and available bank facilities. In FY24 Viva saw profits rocket 19.7 per cent to $10.6m on the back of revenue rising 15.9 per cent to $163m.
Viva stake will help drive Boutique Fitness Studios’ growth
BFS is the master franchisee for Australia and New Zealand for the four Xponential Fitness brands. It has 48 studios trading with 25 scheduled to open over the next 12 months.
The Viva Leisure group has 342 locations across its Club Lime, Hiit Republic, Plus Fitness, Rebalance and Groundup brands. It acquired the Plus Fitness business four years ago.
Viva Leisure CEO and managing director Harry Konstantinou said “The investment into BFS expands Viva’s network to over 400 locations across multiple disciplines and brands, enhancing our diverse offering while simultaneously introducing a new market for Viva Pay and other Viva technologies.
“We look forward to working with BFS founder and CEO Matt Gordin and his team, and the wider Xponential Fitness team to grow the brands in Australia and New Zealand.”
Matt Gordin, Boutique Fitness Studios CEO, said the partnership will enable the BFS team to grow.
“The synergies and platform that Viva brings will help drive our brands forward and our studios to grow stronger and more profitable,” he said.
The BFS network is expected to generate revenue of $25m over the next 12 months.
Synergies and streamlining opportunities
BFS founders remain with the business, with an earn-out opportunity to continue to drive the business. BFS launches in New Zealand this month and will rebrand Viva’s Rebalance studios into Club Pilates.
Viva plans to further integrate BFS into its operational network. Streamlining options include implementing the core member management platform. Viva will add proprietary technology, such as door control, app access, multi-brand access, and digital signage.
The business plans to launch its Viva Pass product in the latter half of next year.
Xponential Fitness president of international Bob Kaufman said the Viva shares purchase is a positive step for BFS.
“Australia is an important strategic region for Xponential’s brands, and we look forward to seeing this drive further growth for Club Pilates, StretchLab, Rumble Boxing, and CycleBar.”
