Viva Leisure acquires three World Gym locations and 25% stake in World Gym Australia

Viva Leisure Limited (ASX: VVA) has made a significant stride towards expanding its footprint in the Australian fitness industry with the acquisition of three World Gym locations and a 25% equity stake in World Gym Australia. The deal, valued at approximately $16.7 million, is poised to enhance Viva Leisure’s growing fitness network and open doors for future expansion in both corporate and franchise operations.

As part of the strategic investment, the company has made an equity purchase in World Gym Australia, a partnership expected to drive substantial financial benefits. The acquisition positions Viva Leisure to capitalize on new opportunities within the fitness industry, enhancing its reach and operational capabilities. The deal is fully funded through existing cash reserves, banking facilities, and up to $1 million in Viva Leisure’s own scrip, ensuring a smooth integration process.

The addition of three new locations in Queensland—Stafford, Coomera, and Underwood—will boost Viva’s presence in the region. This acquisition aligns with the company’s broader strategy to expand its fitness network and target a larger customer base. With the acquisition, Viva’s overall network will encompass over 450 locations across Australia, significantly strengthening its position as a leader in the Australian fitness sector.

A key element of this deal lies in the synergy between the two brands. World Gym Australia’s robust network of over 170,000 members will now join Viva Leisure’s extensive membership base, which already exceeds 587,000. This addition of 169,000 new members provides a scalable platform for expanding Viva Leisure’s range of services and increasing revenue streams, including payments, digital advertising, and retail opportunities.

Harry Konstantinou, CEO and Managing Director of Viva Leisure, expressed enthusiasm about the integration, stating that the acquisition of World Gym Australia would allow Viva to deploy its innovative technologies across the newly acquired network, enhancing operational efficiency and member experiences. He highlighted the potential for leveraging Viva’s member management platform, Viva Pay, and the upcoming Viva Pass to streamline operations and introduce new revenue channels.

Furthermore, this strategic acquisition opens up future opportunities for growth, with a call option to acquire the remaining 75% of World Gym Australia within three years. This path to full ownership will allow Viva to expand its influence in the fitness sector, building on the success of its previous acquisitions, such as Plus Fitness.

World Gym Australia’s founders, Jonathan Davie and Mike Nysten, welcomed the partnership, excited about the growth opportunities it presents. They noted that the collaboration with Viva Leisure’s technology and business systems would be instrumental in furthering World Gym Australia’s ambitions to become the premier large-format fitness provider in the country.

In addition to expanding Viva Leisure’s network and enhancing its service offerings, the acquisition will also contribute to significant retail and franchise synergies. World Gym Australia’s annual retail sales, exceeding $26 million, will complement Viva’s existing retail operations, adding another layer of value to the overall deal.

This acquisition represents a pivotal moment for Viva Leisure as it continues to solidify its status as the largest and most diversified fitness network in Australia. With a strategic focus on expanding its member base and deploying cutting-edge fitness technologies, Viva Leisure is well-positioned for continued growth in the highly competitive fitness industry.