• Steve Young’s company HGGC has invested in a large planet fitness franchise.
  • With the reopening of the gymnasium, planet fitness reserves rose 13 percent in three months.
  • He thinks the Super Bowl championship will be even more exciting as people decide to take shape next year.

HGGC, a middle-market private equity firm founded by Steve Yang, a former NFL quarterback, is betting on many Americans returning to the gym, especially on low-cost planet fitness.

Young Company has acquired a majority stake in 42 Planet Fitness Clubs in Florida, California, New Jersey and Pennsylvania and wants to double its membership in the coming years. Purchases.

HGGC Investment comes at a time when health workers at health clubs in the United States have resorted to overcrowded gym, home fitness machines such as piloton and online gymnastics to restore team fitness.

Despite the growing popularity of indoor sports, the young Grant Fitness-owned planet fitness gym has surpassed its membership and revenue this year before Covid.

“Kovid was a fitness referendum. I think people are responding to the epidemic by saying ‘I need to be healthy.’

Steve Young

Steve Young is the co-founder of HGGC


Although he declined to disclose membership numbers to Grand Fitness, a Planet Fitness spokesman said the total number of Planet Fitness members reached 15 million by the end of the third quarter this year, up from 15.5 million before the outbreak in February 2020. .

Yang declined to say how much HGGC had agreed to pay for its stake in the Planet Fitness franchisee – a loan deal between Carlil Group Group and Goldman Sachs. The private equity firm reviewed the proposal from “several lenders” but chose Carlil and GSM because of its relationship with the HGGC.

“Our competition is a sofa”

Of course, fitness chains are still struggling financially with the epidemic.

Planet Fitness had a net worth of $ 135 million by the end of 2019, but this year it lost $ 15.2 million due to the closure of gyms and immunizations.

At the end of the third quarter of this year, the company recorded a turnover of $ 18.6 million. Shares rose to $ 91.3 on Wednesday, up from $ 87.5 a year earlier in February.

HGGC, on the other hand, hopes to re-open the gym and exploit its desire to re-engage consumers.

The organization is looking at gym visitors who are on the fence or afraid of group fitness to join health clubs under the slogan “Judgment Zone”. Such individuals can start up to $ 10 a month on Planet Fitness membership costs, $ 200 a month in New York, which is much cheaper than ECOX membership.

“Our competition is a sofa, not other gyms. We are trying to catch people who are thinking about fitness for the first time or for a long time,” Young said.

Getting back in shape with Planet Fitness is also cheaper than Peloton, which costs more than $ 1,500 for a bicycle, plus $ 40 a month for the company’s online application.

Knock on the door

Importantly, HGGC investment comes at a good time for gyms.

“Super Bowl is for the fitness industry,” Young said, as individuals work to secure New Year’s resolutions and any broader health goals.

HGGC is working with Grand Fitness founders David Bidwell and Scott Linsky to purchase new gymnasiums and existing gyms that were forced to close during the previous epidemic.

“There may be some M&A, but the focus is on penetrating areas with greater fitness,” Young said.

Under HGGC Investment, Bidwell and Linsky will continue to lead the planet Fitness franchise and remain a minority investor with existing Minority Investor Monogram Capital.

“A lot of gym classes, mom and pop classes, or some chains of organization have gone out of business.