Snap Fitness announced that it has taken on investment from TZP Capital Partners II, L.P. (TZP), a private equity fund focused on investments in U.S.-based lower middle market business and consumer services companies.
According to Snap Fitness, the investment will better position the company to further its growth in both the U.S. and worldwide. Currently, the franchise boasts approximately 2,000 clubs (existing and in development) in 15 different countries.
In December 2013, Snap Fitness announced it was seeking an investment to replace the private equity stake owned by Summit Partners, a growth equity firm based in Boston, Mass.
According to Peter Taunton, the founder and CEO of Snap Fitness, Summit Partners’ sale was expected. “When Summit partnered with us five years ago, we knew this day was coming,” he said. “Normally, private equity funds have a five to six year lifespan — it’s just normal behavior for private equity.”
The amount that TZP plans to invest was not disclosed. According to TZP Group, investment values typically range between $50 million and $250 million, and TZP has over $500 million of capital under its management.
Just as was the case with Summit Partners, Taunton expects the partnership with TZP to last five to six years. However, that doesn’t diminish Taunton’s excitement over the partnership: “We couldn’t be happier with our new partner moving forward,” he said. “We’re excited to see how we can leverage [TZP’s] knowledge to help us grow our brand.”
According to Snap Fitness, Taunton will maintain controlling interest and is the single largest shareholder of the company and operating partner.
In September 2013, Snap Fitness acquired STEELE Fitness, a high-end personal training company, in hopes of bolstering its personal training offerings. As part of the acquisition, Steele Smiley, STEELE Fitness’ founder, joined Snap Fitness as the executive director of STEELE Fitness Advanced Training, to oversee the integration of the training concept into Snap Fitness locations.
Over the past few years, Snap Fitness has seen multiple acquisitions. In addition to STEELE Fitness, the company has acquired two boutique franchises: 9Round and Kosama.
According to Taunton, the company is always on the look out for additional opportunities to expand the company in the health and wellness space. “We’re creating a suite of products that are within the health and wellness space,” he said. “That’s been my vision for the past eight years or so — to provide support to multiple brands through vertical integration. From our perspective, we’ll keep looking for opportunities as they become available.”
By Rachel Zabonick
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Rachel Zabonick-Chonko is the editor-in-chief of Club Solutions Magazine. She can be reached at rachel@peakemedia.com.
