Crunch Holdings, LLC has secured a strategic investment from Leonard Green & Partners (LGP).
The private equity investment firm and its affiliates are not strangers to the active lifestyle market or its brands, retailers and vendors. The firm or its affiliates have, at one time or another, been a partner or owner of Authentic Brands Group, Varsity Brands, The Sports Authority, Big 5 Sporting Goods, PureGym, Life Time Fitness, and many more.
Under the terms of the Crunch agreement, LGP will acquire a majority interest in Crunch Fitness from TPG Growth, the middle market and growth equity platform of global alternative asset management firm TPG, and Crunch’s minority shareholders.
“Founded in 1989 in New York City’s Greenwich Village, Crunch has grown from a single gym with a unique ‘No Judgments’ philosophy into one of the fastest-growing and most respected fitness brands in the world,” said LGP in a media release.
“Ranking No. 1 in the fitness category for the second year in a row and No. 32 overall in the annual Entrepreneur Franchise 500, the world’s first and most comprehensive franchise ranking, Crunch has built a loyal and diverse membership base worldwide with its inclusive culture, innovative group fitness programming, and high-value, low-price gym model.”
Since TPG invested in Crunch in 2019, the brand has “added over 2.1 million members, a 176 percent increase over that period. The brand also significantly expanded its gym footprint, adding 275 locations, more than doubling its unit count.”
Per company figures, Crunch boasts “over three million members and operates more than 500 gyms worldwide.”
“This is an exciting new chapter for Crunch,” said Jim Rowley, CEO of Crunch Fitness. “Leonard Green & Partners has a phenomenal track record of success and investing in consumer brands, and we’re confident their strategic insight and operational expertise will only continue to accelerate our growth while staying true to our core values.
“We’re incredibly grateful to TPG for being an exceptional partner over the past five-plus years,” Rowley continued. “Their support and commitment, especially during the challenges of the pandemic, helped drive our transformation and rapid expansion. We also want to thank our amazing franchisees whose passion and entrepreneurial spirit have been the driving force behind our success and our incredible team members who continuously strive to provide legendary experiences across every Crunch gym.”
John Danhakl, managing partner at Leonard Green & Partners, commented, “What Crunch has accomplished in the past five years is truly unprecedented. We are excited to support the brand’s continued evolution alongside a strong leadership team and franchise network. Crunch’s powerful business fundamentals and distinctive member experience make it an ideal fit for our portfolio.”
“Jim and his team have built a superb company, serving both their members and franchisees well,” said Jonathan Coslet, partner at TPG. “The Crunch team’s creativity, tenacity and customer-centric culture have been hallmarks of their very successful build to date and will continue to drive Crunch’s leadership alongside their new partners at LGP.”
Jefferies LLC served as the lead financial advisor to Crunch, with North Point M&A also acting as a financial advisor. Kirkland & Ellis provided legal counsel.
“I’d also like to thank our advisors for their invaluable insight and support throughout this process,” added Rowley.
Image courtesy Crunch Holdings
