Terra Firma's LA Fitness bid highlights sustained appetite for gyms

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With Terra Firma reportedly considering a bid for struggling UK gym operator LA Fitness, the sector's attractiveness for private equity looks set to continue.

The Financial Times reports that the bid would see the GP compete with trade buyers Pure Gym and Fitness First, which have been circling the 43-gym fitness chain.

According to sources, LA Fitness went into administration last year through a company voluntary arrangement process, having been under pressure from lower-cost competitors.

The company sold 33 of its locations to Sports Direct in 2014, effectively withdrawing from the northern market to focus on London and the south-east.

Terra Firma's potential bid highlights an ongoing interest from private equity in the fitness and health club sector. In addition to US firm CCMP, the owners of Pure Gym, there have been more than eight PE and VC investments in the sector across Europe since June 2014.

Most recently, NorthEdge invested £11.5m in British gym chain Total Fitness, while BGF topped up an initial £2m investment in Xercise4Less with a further £5m in January.

Late last year, Encore also picked up two upmarket health club operators in quick succession, acquiring Third Space and 37 Degrees in October and November, respectively.