McLean, VA — Titan Fitness' recent purchase of two clubs in Nevada is just one more step in the club company's plan to grow from 16 Gold's Gym locations to 60 in the next five years. To hit that number, the company will have to purchase or build eight to 10 clubs each year, something that today's economy may make more difficult in the short term, says Aaron Lieberman, chief development officer at Titan Fitness, McLean, VA.
“We're going to have to be diligent about what deals we look at and what deals we follow through with,” he says, noting that the economy makes it difficult to get a sense of what the true financials are for clubs under acquisition consideration.
Last month, the company, which is one of the largest Gold's Gym franchisees, purchased a club in Reno, NV, and another in Sparks, NV, both owned by Brad Kloss and Kevin Gustafson. Lieberman would not disclose the purchase price of the clubs.
Titan plans to enter new markets through acquisition and then grow those markets through more acquisitions and greenfield projects, Lieberman says.
“Our investors want us to keep doing deals where deals make sense,” he says. The company's equity partners are WestView Capital Partners, Boston, and National City Equity Partners, Cleveland, OH, which began backing Titan Fitness in January 2008.
Last year, the company's management team, headed by CEO Jeff Skeen, reviewed 30 possible acquisitions, which included 225 total clubs. Many of those possible acquisitions were other Gold's Gym facilities, Lieberman says. The company has a strict set of criteria for choosing acquisitions. The clubs have to be of a certain size, be profitable, offer a good product, be a strong competitor in the market, be able to grow in the market and have a great local management team, he says.
“The local management team is what allows us to have disparate locations,” Lieberman says. The company owns clubs in North Carolina, Minnesota and now Nevada.
Lieberman says that the company plans to add another new region every year.