The private equity backer of David Lloyd has reached an agreement with investors to sell its stake in the upmarket gym chain to itself after previous stalled attempts to offload the group.
TDR Capital said on Monday it had closed a newly formed so-called continuation vehicle to acquire majority control of the leisure centre business from another TDR fund.
The transaction values David Lloyd, which counts a gym at Clonskeagh in south Dublin among its portfolio, at about £2 billion (€2.3 billion), according to a person familiar with the matter, with backers including the investment manager of Chris Hohn’s Children’s Investment Fund Foundation and European private markets firm CVC contributing towards about £800 million in mostly new equity.
The remaining £1.2 billion consisted of the gym chain’s existing debt rolling into the new vehicle, the person said.
READ MORE
The fact that most of the £800 million equity is new suggests that few investors in the original TDR fund chose to roll over their investments into the new vehicle.
Continuation vehicles are funds established by private equity firms to buy one or multiple assets from other funds controlled by the same buyout group. They have become increasingly popular in recent years as the industry struggles to sell assets to other buyout firms or companies, or to list them on public markets.
The Financial Times revealed this year that TDR was exploring a continuation vehicle for David Lloyd after the firm worked with bankers on potentially selling the business in 2017 and also considering a sale last year. No transaction happened on either occasion.
TDR bought David Lloyd in 2013 using £190 million from its fund and £528 million in debt. By mid-2021 the buyout firm had recouped more than £550 million in dividends and other repayments, almost three times its initial investment. That was paid for in part by loading fresh debt on to David Lloyd. David Lloyd has been working on a “premiumisation” of its clubs, including adding new spa retreats at existing locations. The company spent £46 million on “investment and innovation” in 2023.
It operates more than 130 clubs mostly in the UK with some in Europe – up from 90 when TDR acquired the group.
Through the continuation vehicle TDR said £100 million had been set aside to invest in David Lloyd and support its plans to open more clubs.
Tom Mitchell, managing partner at TDR, said David Lloyd had been a “highly successful investment” and it was “excited by the opportunities ahead for the business”.
Russell Barnes, chief executive of David Lloyd, welcomed TDR’s continued backing and said the focus would remain “on investing in premium site features, including spas and facilities for fast-growing sports like padel”.
Copyright The Financial Times Limited 2025
