Two of the more well-known operators in the fitness club industry, Mark Mastrov and the brother tandem of Kirk and John Galiani, have formed a partnership.
In an agreement announced earlier this week from New Evolution Ventures (NeV), Lafayette, CA, for which Mastrov is chairman and co-founder, the Galianis will develop and operate a collection of health clubs in the Mid-Atlantic region for the company.
The new partnership, US Fitness, is backed by NeV and Vision Capital, an international private equity investor which NeV added last June. Integrity Square, New York, was the financial advisory firm on the transaction.
The deal includes the Galianis’ Onelife Fitness clubs based in Norfolk, VA, Crunch Fitness clubs in Washington, DC, and other new facilities in various stages of development. In addition, the Galianis have joined the NeV board of directors.
The partnership brings together the founder of 24 Hour Fitness (Mastrov) with the former CEO (Kirk Galiani) and COO (John Galiani) of Gold’s Gym International. The Galianis also were part-owners of Gold’s Gym and were two of the most successful Gold’s Gym franchisees before leaving the Gold’s brand in 2009.
“I’ve always admired Kirk and John Galiani for being two of the top operators in the industry,” Mastrov said in a statement. “The Mid-Atlantic region has strong growth potential for our brands, and I’m excited to rapidly grow our footprint. We’re honored to have Kirk and John join the NeV board as we continue to build NeV into a global health, wellness and fitness company.”
In late 2010, NeV, which also owns Crunch, announced that the Galianis had signed a development agreement for Crunch franchise clubs in the DC area.
“John and I are excited to partner with NeV and Vision Capital,” Kirk Galiani, co-CEO of US Fitness, said in a statement. “We could not have found better partners than NeV, led by Mark Mastrov, arguably the greatest mind in the fitness industry, and Vision Capital, a top-tier private equity firm.”
John Galiani added: “We believe there will be significant growth prospects in our industry over the next two to five years, and our ability to develop and operate clubs under different brands within the NeV portfolio puts us in a very strong position.”
Vision Capital made a significant investment in NeV last June, according to the announcement. One source said that investment was more than $100 million. Terms of the investment with US Fitness were not disclosed.
“Kirk and John’s impressive track record of creating value by building, acquiring, operating and selling fitness businesses including Gold’s Gym International and Pulse Fitness Clubs speaks for itself,” Matt Constantino, managing partner at Vision Capital, said in a statement. “We believe the U.S. health club industry is ripe for consolidation and are confident the NeV/Galiani partnership is ideally suited to thrive in this environment.”
Mastrov co-founded NeV in 2008 with Jim Rowley and Mike Feeney. In addition to Crunch, NeV also operates UFC Gym, Madonna’s Hard Candy Fitness, Steve Nash Fitness World and Sports Club in Canada and Mexico’s Energy Fitness. Last year, NeV made an investment in Atlanta-based Sharecare, an interactive question-and-answer website that focuses on health care. The website was created by Dr. Mehmet Oz in partnership with Oprah Winfrey’s Harpo Studios.