Premium Health Club Third Space Set for Potential £700m Sale
The operator of London-based luxury fitness centres, Third Space, is reportedly preparing for a sale that could see its valuation reach approximately £700 million. KSL Capital Partners, the American private equity firm that owns a stake in the business, is in discussions regarding the auction process, which may begin either this year or in the next.
Potential Sale Process
According to sources from the City, investment banks, including Goldman Sachs, are being considered to manage the forthcoming sale. This development follows KSL’s acquisition of a majority interest in Third Space from Encore Capital in 2021.
Third Space’s Market Position
Third Space currently operates 15 high-end fitness clubs in London, situated in prime locations such as the City and Soho. The clubs distinguish themselves in the competitive gym market by offering a range of exclusive services, including HYROX competitions, hot yoga sessions, and various fitness classes tailored to discerning customers.
Recent Financial Developments
Last year, Third Space secured £75 million in debt financing from Oaknorth, with support from Searchlight Capital, another ongoing lender. This funding aims to facilitate the club’s expansion in a thriving health and fitness market.
High Demand for Memberships
Colin Waggett, the chief executive of Third Space, noted the robust demand for memberships, stating that many of the clubs currently have waiting lists. “Our business sits at the heart of Londoners’ desire for health and fitness, authentic experiences, and luxury service,” Waggett explained, underscoring the club’s unique position to cater to these demands.
Background
Following the trend towards premium fitness experiences, Third Space has capitalised on the growing consumer interest in health and wellness. The company’s focus on providing luxury amenities and innovative classes has made it a sought-after option for fitness enthusiasts in London.
Both KSL Capital Partners and Goldman Sachs have chosen not to comment on the potential sale at this time, leaving the market speculation and industry analysts to closely observe the situation.
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