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Viva Leisure has this morning announced that it has entered into a binding agreement for a strategic investment of 25% in World Gym Australia together with the 100% acquisition of three World Gym locations, and the establishment of a joint venture with the founders for the roll-out of more corporate owned locations on a 50:50 basis.

The Investment of $16.7 million at a blended multiple of 4.1x EBITDA will be funded from existing cash reserves, bank facilities and up to $1 million of Viva Leisure’s scrip acquisition option.

The investment also includes an option to acquire the remaining share of the World Gym Australia business within 36 months at ASX-listed Viva Leisure’s discretion.

World Gym Australia, the Australian master franchisee of the World Gym brand, currently operates 47 sites and, with an additional 13 location licences sold, and is on target to open in a further 10 locations over the next 12 months.

World Gym Australia founders Mike Nysten and Jon Davie are staying on and will retain the remaining 75% not being acquired by Viva Leisure, with a mandate and incentive with the call option to continue to drive the business.

The investment will further diversify Viva Leisure business, while taking advantage of the strong growth trajectory World Gym Australia is achieving and is expected to providing Viva Leisure with an additional $12.5 million in revenues (from the clubs) and $4 million in EBITDA (for the investment).

The investment includes provisions for Viva technology to be implemented across the World Gym Australia network in the future, including Viva Pay and The Hub. Viva Leisure also sees an opportunity for the inclusion of the World Gym Australia locations into the Viva Pass product that is currently under development and will be launched in the second half of the current financial year.

Commenting on the investment, Viva Leisure Chief Executive and Managing Director, Harry Konstantinou advised “the investment into the world gym brand expands viva's network to over 450 locations while strengthening our reach into the big-box club segment and simultaneously introducing a new market for viva pay and other viva technologies.”

In September, Viva Leisure revealed a binding agreement for the $2 million acquisition of a 34% stake in Boutique Fitness Studios (BFS), the master franchisee of Xponential Fitness-owned brands Club Pilates, Rumble Boxing, StretchLab and CycleBar in Australia and New Zealand.

In October, World Gym Taiwan announced its acquisition of its parent company, the USA-based World Gym International (WGI).

Completion is expected before the end of February 2025.

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