The investment firm has created Fitness Holdings Worldwide and acquired the Q Clubs.
NEW YORK - As part of a $900 million recapitalization, McCown DeLeeuw - the lead investor in Fitness Holdings Inc. (FHI), Fitness Holdings Europe (FHE) and Fitness Holdings Asia (FHA) - has consolidated the three companies under the new name of Fitness Holdings Worldwide (FHW). The new company now operates more than 350 clubs, approximately 240 of which are 24 Hour Fitness facilities.
McCown DeLeeuw's David King explained that there were several reasons for the formation of FHW. First of all, rolling FHI, FHE and FHA into one company created a better capital solution, since it's easier to raise capital for a global company than for a company in Europe or Asia. Also, the consolidation gives employees more growth opportunities and allows for the sharing of best practices, something that was difficult to do when FHI, FHE and FHA operated separately. Also, King believes that the united entity can break new ground by developing a global fitness brand. "We don't think that's really been done yet," he said.
As McCown DeLeeuw formed FHW, the investment firm simultaneously confirmed a longstanding rumor that the Q Clubs chain was up for acquisition - something that King jokingly calls the industry's "worst-kept secret." Specifically, during the recapitalization, the 18 Q Clubs became part of FHW. These clubs bring FHW additional management expertise, plus key new markets, particularly Phoenix. "That was one of our big holes in the western United States," King said.