Actic Group gearing up for IPO to pursue expansion

6 Apr 2017

With 166 clubs in five countries generating sales of 802 million Swedish kronor (€80.2m) last year, the Actic Group is gearing up for an initial public offering (IPO) projected to take place on April 7 on Nasdaq Stockholm, implying a valuation of about SEK 803 million (€80.3m) for the Swedish fitness club operator.

The majority of Actic Group’s shares was taken over in 2012 by IK Investment Partners, a private equity firm. Actic should thus become the third European fitness group to head for the stock exchange in the last two years, after The Gym Group and Basic-Fit – but unlike the British and Dutch companies, it operates in the mid-market segment, with monthly membership prices set at about €40 to €50.

Actic had 211,000 members at the end of last year. The group then comprised 118 gyms in Sweden, with the remainder spread between Norway, Finland and Austria. About 70% of Actic’s clubs are located in public swimming facilities and they are mostly situated in small and mid-sized towns.

The Swedish group’s EBITDA reached SEK 35.3 million (€3.5m) in 2016, down from SEK83.2 million, chiefly due to one-off costs and openings in Germany. Actic ended the year with a loss of SEK 4.0 million, compared with profit of SEK 33.6 million in 2015.

With a price set at SEK 50.5 per ATIC share, the offering consists of about 8.6 million shares, including some 5.3 million newly issued shares and nearly 3.3 million shares offered by IK.

The new shares are expected to raise gross proceeds of about SEK 270 million (€27m) before IPO costs. They should be used to repay loans, to increase financial flexibility and enable continued acquisitions. Actic has identified particular potential in the German market, estimated at 30 more clubs in the near term and 75 in the medium term, excluding standalone facilities.

The offering further includes an over-allotment option of an extra 15%, which would raise the size of the offering to about 62% of the shares outstanding.

The IPO consists of an offer to the general public in Sweden, and an offer to institutional investors. Three entities have agreed to acquire shares amounting to about 31% of the offering, including the over-allotment, subject to conditions. Between the three of them, Athanase Industrial Partner Swedbank Robur and the Fourth Swedish National Pension Fund would thus hold about 19% of Actic’s shares after the offering.

“The stock exchange listing, which will result in increased recognition of our brand and offering, among other benefits, comprises a key milestone in the company’s development,” said Christer Zaar, the group’s chief executive. “Actic’s management anticipates further strengthening of market positions through new establishments and acquisitions, in parallel with the continuous development of our offering to our members.”

The Swedish company has been growing through organic openings and acquisitions in the last years. It bought 13 gyms trading as Flex last year and agreed in February to buy another three fitness clubs in Sweden.

Read all the details in FNE#29.

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