Orangetheory and Self Esteem Brands have announced plans to merge to create a brand new company with annual sales of approximately $3.5 billion and 7,000 franchisees in 50 countries. The name of the new company has not yet been revealed.
The deal will be a fully stock-based transaction, creating one of the largest fitness, health and wellness companies globally.
The two already share an investor in the form of venture capital firm Roark Capital.
The portfolio of brands will include Orangetheory Fitness, Anytime Fitness, Waxing the City, Basecamp Fitness/SUMHIIT Fitness, The Bar Method and Stronger U Nutrition.
"From our beginnings in 2002 with the first Anytime Fitness club, we have enjoyed rapid growth worldwide thanks to both the power of small business franchising and our blend of brands that meet the ever-increasing need for more holistic and personalized health and wellness services," said Chuck Runyon, co-founder of Anytime Fitness and CEO of Self Esteem Brands. "With this merger, we will enrich even more people around the world through franchising, community and the services they need - now and in the future - on their personal health and wellness journeys."
"The merger will result in significant international scale for the new company, with continued investment in data and analytics, technology, products and services that will help franchisees across all of our brands outperform the growing consumer demand for holistic health and wellness services," he said," Runyon continued.
"As we begin a new chapter, Orangetheory will continue to build on our legacy of innovation and transformation," commented Dave Long, co-founder and CEO of Orangetheory Fitness. "With this groundbreaking agreement, we are one step closer to setting a new standard for what it means to be a global leader in fitness, health and wellness. We are excited about what our combined companies will be able to achieve together to capture increasing market share, unlock future growth and pioneer a healthier tomorrow for consumers worldwide."
Erik Morris, Head of Investments at Roark Capital: "The founders and management teams at Self Esteem Brands and Orangetheory have built great brands, each with a long history of remarkable growth. We are excited to continue working with the teams to create a leading global franchise platform in the health and wellness sector."
Last month, Runyon issued a statement denying that Anytime Fitness was for sale, when industry rumors suggested that something was in the works.
In a recent interview with HCM, Dave Mortensen, co-founder of Self Esteem Brands, was clear that the company was on the growth track and that it would do this through mergers and acquisitions rather than organic growth. He said: "Within the next five years, we want to reach 10,000 units globally. Some of this will happen organically through the brands we already have, the rest through acquisitions. I imagine it will be an 80/20 split, with about 80 percent of our growth coming from our current brands and about 20 percent from new acquisitions we bring on board.
Mortensen was clear that Self Esteem Brands was looking for brands with at least 100 locations, saying: "In the future, we will look for a little more scale before we acquire. Some of the brands we have now came in with less scale. Going forward, I think we will look for franchise brands that already have 100+ units before we bring them into Self Esteem Brands."
