Sir Richard Branson is selling Virgin Active, his health clubs business, to a private equity firm in a deal that values the business at £110m.
The sale to Bridgepoint Capital, which nets Sir Richard £42m, is the latest in a string of disposals from the Virgin empire. The group, which started Virgin Active in 1998, said it would pump the proceeds into developing Virgin Mobile, its mobile telephones business, into a global brand.
Bridgepoint, which has a history of investing in the fitness sector, will own 55 per cent of Virgin Active, which it plans to roll out around the world. Virgin will retain 37 per cent of the business while the management, led by Frank Reed, the chief executive, will keep 8 per cent.
The disposal comes one week after Sir Richard raised £28.5m by selling La Residencia hotel in Majorca and his stake in Le Manoir aux Quat'Saisons, the luxury hotel and Michelin-starred restaurant in Oxfordshire. Sir Richard is also looking to sell Kensington Roof Gardens, a private nightclub and restaurant in West London, as he switches his attention to luxury resorts.
A spokesman for Virgin denied the sales were part of a cash-raising drive to support the rest of its empire. "Virgin is a £5bn venture capital business. The Virgin Active sale was part of the normal strategy of development," he said.
Bridgepoint, which will retain the Virgin brand name, intends to invest a further £10m on expanding the health clubs. It will open three in London later this year, increasing the number of UK sites to 13. It is planning further openings in Europe and is eyeing a site in Italy. The private equity group previously backed Mr Reed and Matthew Bucknall, Virgin Active's finance director, in the 1994 £10m buyout of LivingWell, the health clubs now owned by Hilton Group.
Most of Virgin Active's 350,000 members are in South Africa, which it entered in January last year with the purchase of the Healthlands chain.Reuse content