As part of its strategy to transform the Group into a holiday and leisure company, Club Méditerranée confirms its plans to acquire Gymnase Club
Club Méditerranée today announced that it has agreed terms with Nexity for an agreement to acquire Gymnase Club in its entirety, including all its activities linked to its current 200 sports clubs (38 proprietary clubs ; 147 franchised clubs ; 15 clubs within companies) and its subsidiary activities (Edifit, IMF and Coach Company).
The finalisation of the acquisition is expected to take place very soon.
This operation fits perfectly into the transformation strategy of Club Méditerranée, which is seeking to move into new areas of activity based around its brand and the club concept in order rapidly to become a global player in leisure and relaxation.
Fitness is a legitimate area of development for Club Méditerranée, and is already a focal part of most of the Club’s villages. Playing sport in a social way is key for GMs, this sector has long been a clear priority.
Fitness is organised around clubs, in urban environments and is therefore part of the Club’s strategy aiming to deepen its relationships with members throughout the year and not just on holiday.
Fitness is a very profitable and promising sector throughout the world. In France, its penetration rate, at 3%, is still low, but this is expected to rise above 10% in the next few years, demonstrating significant growth potential.
The acquisition of Gymnase Club therefore presents a unique opportunity to implement and accelerate Club Méditerranée’s strategy in France.
Gymnase Club has a leading position in the French market with high-bracket premises and strong presence in and around Paris and Lyon. The group is in a turnaround period, but now in a healthy position ; following the refurbishment of its clubs and rationalisation of its structures and working methods, the club has seen better results, returning to breakeven and improving its profitability.
This acquisition will lead to rapid synergies, enabling Club Méditerranée to develop into fitness with a focus on the following elements:
* Strengthening of the ‘club’ concept, with fitness clubs acting as a hub for regular contact with GMs, both current and potential, and providing opportunities for them to discover Club Med’s products and services throughout the year ;
* Sales of Gymnase Club cards to the Club’s members (GMs) and the sale of Club Med holidays to members of Gymnase Club ;
* Development of exchange and sharing of experience between Gymnase Club employees and Club Med GO : reciprocal knowledge transfer between villages and fitness centres ; setting up of joint training sessions;
This operation, valuing the company at 41.16 million Euros (270 million francs) will be financed in cash. It will be value creating for Club Méditerranée.
The acquisition will contribute to profits from 2002 after goodwill and financial costs and will contribute even further after then ; in 2001 its impact will be neutral.
The profitability outlook from fitness is in line with the group’s ROCE target of more than 12%, which Gymnase Club will exceed from 2003.
Commenting on the acquisition, Philippe Bourguignon, Chairman of the Board of Club Méditerranée said :
“With the acquisition of Gymnase Club, Club Méditerranée continues to pursue the strategy it has followed since 1998, focusing on the Club concept and the strong feeling of belonging felt by its members, enabling it to embody a whole style of living.
Following the creation of Club Med World, Club Med on-line, OYYO Ç made in Club Med È, and fitness product and sportswear collection, fitness will make an effective contribution to Club Med’s refocusing on the club concept and provide a coherent and legitimate contribution to the leisure offer given to the Club Méditerrannée’s members including those of Gymnase Club.”