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Fitness First takeover gets green light from competition watchdog

Thursday, 1 Dec 2016 08:36:30 | Thuy Ong

The ACCC found individual operators and boot camps or specialist studios could compete against chains. (Supplied: Daniel Carson)

The competition watchdog says it will not oppose private equity firm Quadrant Fund 5's proposed acquisition of Fitness First Asia Pacific, which operates around 60 gyms in Australia.

Quadrant already owns Goodlife Health Clubs, and is the head franchisor of gym chain Jetts Fitness. Both businesses overlap in Victoria, New South Wales and Queensland.

The Australian Competition and Consumer Commission said it took into account high churn rates affecting the gym industry in the past few years, where a number of new operators, including companies from overseas have entered the market and experienced significant growth in a short time frame.

"The ACCC determined that following the proposed acquisition, Fitness First, Goodlife, and Jetts would continue to face competition from other alternatives, including low cost gyms such as Anytime Fitness and specialist gym providers such as F45 and Crossfit," ACCC commissioner Roger Featherston said.

Concerns were raised about the market reach of Fitness First and Goodlife, which are the two largest chains of full service gyms - gyms that provide weight and cardio equipment and group training classes - in Australia.

Woman doing chin lifts in the gym Photo: The ACCC found individual operators and boot camps or specialist studios could compete against chains. (Supplied: Daniel Carson)

"The ACCC also found that convenience of location was an important factor in a consumer's choice of gym thereby giving an individual gym an opportunity to compete against a chain of gyms," Mr Featherston said.

"Other suppliers of fitness services, such as bootcamps, or specialist studios, such as pilates, also impose a degree of competitive constraint on full service gyms."

Quadrant's no.5 fund is worth $980 million and, following the acquisition, would operate over 130 gyms under the Fitness First and Goodlife brands.

Quadrant owns some of the 200 Jetts gyms in Australia, but the majority are operated by franchisees.

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