Titan Fitness, McLean, VA, has purchased seven Charlotte, NC-based Sports & Fitness clubs for an undisclosed sum, the company announced.
Titan Fitness, which is the parent company of Fitness Connection, now has 25 clubs, which are located in Charlotte and Raleigh, NC; Houston and Dallas, and Reno, NV. The company plans to expand the number of locations in Charlotte, says Jeff Skeen, president and CEO of Titan Fitness, although he would not disclose a specific growth goal to Club Industry.
Sports & Fitness clubs had a strong management team, Skeen says, an asset he ensures in all the companies that Titan acquires because he likes to keep existing management on board to run the clubs while Titan Fitness focuses on growth.
Evan Miller, founder of Sports & Fitness, will become regional president for Titan Fitness, and the company will keep the rest of management as well.
Miller said in a press release that the conversion of his gyms would begin immediately with a seamless transition forecast for both staff and members.
"I am proud of what we built with Sports & Fitness," Miller said. "I also wanted our team to have expanded opportunities with an emerging national brand."
The Sports & Fitness chain is similar in price point and size to the existing Fitness Connection clubs. Sports & Fitness' lowest price point is $14.95 while Fitness Connection's is $9.95. Most Fitness Connection locations average 45,000 square feet while about one-third of the Sports & Fitness locations are 16,000 square feet, and the rest are closer to 30,000 square feet. Skeen says that some of the locations will be expanded and renovated (including new equipment). All the locations will be rebranded as Fitness Connection and will add programs and services.
Titan Fitness had been a Gold's Gym franchisee with 10 clubs prior to September 2011 when the company completed a $4.6 million equity offering with its two private equity fund backers, WestView Capital Partners, Boston, and PNC Erieview Capital (formerly National City Equity Partners), Cleveland, and purchased seven Fitness Connection clubs. At that time, Titan stepped away from its agreement with Gold's, rebranding to Fitness Connection.
At one time, Skeen noted that the company wanted to grow to 60 clubs within five years, but he says now that the recession slowed growth for many companies, including his. During the recession, Skeen and his team looked at 300 locations for possible acquisition, but most of those locations had decreasing profits, and Titan is only interested in acquiring growing businesses with a stable cash flow.
"We just don't build and grow to hit a number," he says. "We do it because it makes sense to do the acquisition."
Growth plans are strong again, Skeen says, without giving a specific growth goal for 2013.
"We are continually looking for opportunities," he says. "We are out talking with landlords, looking at real estate. We still are in conversations with chains. We haven't really [said] that we are going to buy 20 more gyms or build 20 more. We are just feverishly looking to grow."