Viva Leisure Limited (ASX: VVA) has announced a transformative $16.7 million acquisition, securing a 25% stake in World Gym Australia (WGA) and three corporate gym locations in Queensland. This acquisition marks Viva’s second-largest to date and positions the company as a leader in the Australian fitness market.
Key Highlights of the Acquisition
- Strategic Expansion:
- Addition of three World Gym locations in Stafford, Coomera, and Underwood, boosting Viva’s presence in Queensland.
- Viva now operates over 450 locations, with plans for further growth.
- Membership Growth:
- WGA’s 169,000 members join Viva’s network, increasing the total membership base to over 587,000.
- Financial Strength:
- The acquisition was completed at an attractive 4.1x EBITDA multiple, with $4 million in pre-synergy earnings expected annually.
Future Growth Opportunities
Viva Leisure gains significant opportunities through its partnership with WGA:
- Option to Acquire Remaining Stake: Viva holds a call option to purchase the remaining 75% of WGA within 36 months.
- Network Expansion: A joint venture to develop additional corporate gym locations is underway, supporting Viva’s ambitious growth strategy.
- Retail Synergies: WGA’s $26 million annual retail sales (including merchandise and supplements) will expand Viva’s retail portfolio.
Technology Integration: A Game-Changer
Viva plans to deploy its proprietary technology across WGA’s network, unlocking new efficiencies and revenue streams:
- The Hub: Streamlined member and franchisee management platform.
- Viva Pay: Expected to process $140 million annually, reducing transaction costs and enhancing payment systems for franchisees.
- Viva Pass: Multi-brand access solution launching in FY2025, expanding offerings for corporate and individual members.
These innovations are set to drive operational efficiencies and elevate the member experience, further differentiating Viva in the fitness industry.
A Strong Partnership for Growth
Harry Konstantinou, CEO of Viva Leisure, emphasized the strategic alignment between the two companies:
“This partnership brings together Viva’s expertise in technology and operational excellence with WGA’s strong brand and big-box format. Together, we will grow WGA’s network and establish it as Australia’s premier large-format fitness brand.”
WGA founders, Mike Nysten and Jonathan Davie, echoed this sentiment:
“With Viva’s support and systems, we are poised to exceed all previous milestones and elevate World Gym Australia to the number one large-format gym offering in the country.”
Path to Dominance in Australian Fitness
This acquisition builds on Viva’s proven track record, following the successful integration of Plus Fitness. With a pipeline of over 100 additional locations already secured, Viva is poised to dominate the Australian fitness market.
Conclusion
The acquisition of a stake in World Gym Australia and three Queensland locations solidifies Viva Leisure as a leader in the Australian fitness sector. With a growing network, innovative technology, and strategic partnerships, Viva is well-positioned to deliver sustainable growth and expand its community-driven fitness offerings.
