Building a business whose objective is to make people happy has always fascinated me. Consider this:
The VLCC group was started in 1989 by Vandana Luthra and is today a Rs. 1.40 Billion company.
Both the large US health club chains: 24- Hour Fitness & Bally Fitness was started in 1983 as single club locations. Both are currently at over USD 1 billion in revenues. 24-Hour Fitness is still managed by its founder Mark S. Mastrov.
Sid and Jenny Craig founded Jenny Craig Inc., in Australia and over 20 years built out a multi-national business with 655 Centers operating in six countries.
In India, the business of health, fitness & sports has been centered around sponsorship and telecast of cricket. The following strands of business models seem to be now emerging:
Sports Events such as the Hyderabad Run, The marathons in Pune, Delhi and Mumbai.
Sports Tourism – tours for sports lovers.
Health clubs – Talwalkars is the only genuine chain that we have in India at this point.
Recreational Clubs (golf, tennis, dining facilities) funded by membership fees.
Entrepreneurs in India are experimenting along all or some of the above approaches. For example, Saumil Majmudar has founded Sportz Village focusing on the relatively wide portfolio of business lines: sports facilities, sports events, sports tours and sponsorship. Urban Yoga, a brand of the Indus-League Clothing Ltd. (ICICI Ventures and Draper International had originally funded this company which has now been sold to Pantaloon) is setting up Yoga Studios as part of the brand extension of their clothing line.
Is there possibility of building up a local Indian brand in this category to exit out as part of a global M&A deal? – that is a question that arises given the changing lifestyles of the middle class in this emerging companies.
While you ponder that question here are details of some Private Equity deals:
European deals
LA Fitness (owned by MidOcean Partners) and and Total Fitness (owned by Legal and General Ventures) acquired Esporta from Duke Street Capital. Esporta operates more than 50 clubs in UK at a total deal size of approx. £640m in 2006.
Legal and General Ventures acquired Total Fitness which operates 21 clubs in North West England at an undisclosed sum in 2004.
Boundary acquired The Club Company Limited which operates 11 country clubs and golf facilities in England at a sum of £96m in 2006.
Burgolf Investments BV acquired BlueGreen from Duke Street Capital. BlueGreen is a golf club and hotel company in France at a Undisclosed in 2004.
US deals
Forstmann Little acquired 24 Hour Fitness at an undisclosed sum in 2005.
KSL Capital Partners acquired ClubCorp Inc. which operates 170 golf courses and clubs at a sum of USD 1.8 billion in 2006.
Angelo Gordon acquired Crunch Fitness a Health club operator at a sum of USD 45 million (includes clubs acquired from other chains too) in 2006.
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