Crunch Fitness Sale Consideration by TPG

By Abigail Summerville

NEW YORK (Reuters) – Buyout firm TPG is considering a potential sale of Crunch Fitness, which could value the gym chain at over $1.5 billion, including debt.

TPG, which acquired Crunch through its buyout arm focusing on smaller acquisitions, is collaborating with investment bank Jefferies on a sale process that could launch in the first half of next year. Sources, requesting anonymity due to confidentiality, noted this information.

Both TPG and Jefferies declined to comment, while Crunch Fitness did not immediately respond to inquiries.

Potential buyers include other private equity firms. Based on industry comparable transactions, Crunch could command a valuation over 15 times its 12-month earnings before interest, taxes, depreciation, and amortization, estimated at around $100 million.

Private equity firms have shown a keen interest in the fitness and wellness sector due to the predictable cash flows from subscription memberships and franchise opportunities.

In September, buyout firm L Catterton acquired Solidcore, focused on pilates, for $600 million to $700 million. In October, 26North Partners, backed by Josh Harris, agreed to buy Onelife Fitness.

Founded in 1989, Crunch Fitness began with a basement studio in New York's Greenwich Village. Currently, it has about 2.5 million members and operates over 460 gyms across various countries, including the U.S., Australia, Canada, Costa Rica, Portugal, Puerto Rico, and Spain.

In 2009, industry veterans Mark Mastrov and Jim Rowley, along with the private equity arm of Angelo Gordon, purchased Crunch out of bankruptcy.

Crunch competes with other gym chains like Planet Fitness and 24 Hour Fitness.

TPG Growth, which acquired Crunch in 2019, has made investments across various industries, including life sciences, cybersecurity, and ride-hailing apps like Uber.