Pure Gym shelves IPO for £300m KKR equity fundraising
The UK’s largest gym chain Pure Gym today announced it has raked in £300m equity investment from private equity giant KKR, choosing to funnel fresh funds into its expansion plans before hitting public markets.
KKR will become a significant minority investor in Pure Gym following the fundraising, alongside the company’s management and its existing majority shareholder Leonard Green & Partners.
The fresh funds will go towards what the gym touted as its “ambitious expansion plans”, as it seeks out new sites to add to its portfolio – including three in the US .
After Covid lockdowns hammered the company’s balance sheet, leading to a £200m loss in its 2020 financial year, Pure Gym said its third quarter revenues this year had “bounced back robustly from the challenges of the pandemic”, and were now ahead of pre-pandemic 2019 levels.
It comes after it first emerged that the gym group was mulling an IPO in August, but two months later, is understood to have abandoned the plans due to market uncertainty.
“We are simply delighted to welcome today an investment firm of KKR’s stature – a firm I have known and respected for many years – as our new strategic partner,” Pure Gym CEO Humphrey Cobbold said.
“To have investors of the calibre of KKR and LGP supporting our business is a testament to the extraordinary efforts of every single colleague across our enterprise.”
Although London had a record first three quarters and has hosted some blockbuster IPOs this year – namely Oxford Nanopore’s £5b market debut in September and Darktrace’s £1.7bn IPO in April – investors’ appetite for listings is souring towards the end of the year, as inflation fears grow and the emergence of the Omicron Covid variant unsettles markets.
Pure Gym isn’t the only UK firm to get cold feet when it comes to hitting London’s public markets this year. Uncertainty in the hospitality industry has led Scottish brewery BrewDog to put its £2.1bn IPO plans on hold until as far as 2023, while steakhouse chain Hawksmoor also ditched its plans for the same reason.
Last month, roof tiling supplier Marley postponed its £500m IPO due to “market volatility”, hot on the heels of the same decision by online marketplace Fruugo and energy investor Blackfinch Renewable Europe.