Investor Buys $200M+ Stake In Snap Fitness

Investor Buys $200M+ Stake In Snap Fitness

A “significant” amount of Snap Fitness shares are changing hands as TZP Capital Partners buys Summit Partners’ more than $200 million stake in the company.

Chanhassen-based fitness club chain Snap Fitness announced Thursday that private equity firm TZP Capital Partners has invested at least $200 million into the company.
 
According to Snap Fitness CEO Peter Taunton, New York-based TZP bought the entire stake previously owned by Boston-based private equity firm Summit Partners—which said in November that it would be putting its shares up for sale. Taunton said TZP bought a portion of his shares as well.
 
Although the company did not disclose the exact price of the transaction, Taunton told Twin Cities Business that it was a “significant investment . . . north of $200 million.”
 
While Taunton said the money from the investment won’t directly fund any of the company’s growth or operations, he said it “positions us to build on the dramatic success we have enjoyed over the last few years.”

 
Snap Fitness saw $20 million in earnings and $65 million in revenue for its most recent fiscal year, up from $5 million in earnings and $18 million in revenue in 2008. Taunton said he expects to double the company’s profits and revenue over the next five years.
 
“With an extremely strong management team led by Peter and our significant expertise in helping to grow multiple franchised brands, we believe we can build on Snap’s strong foundation,” TZP Managing Partner Samuel Katz said in a statement.
 
Other companies in TZP’s portfolio include The Dwyer Group, which owns such franchises as Mr. Rooter Plumbing, Glass Doctor, and Mr. Electric.
 
Founded in 2003, Snap Fitness currently has about 2,000 clubs open or in development in 15 countries. Its clubs are open around the clock and are meant to provide a smaller, more convenient alternative to larger fitness centers. Taunton expects to add between 250 and 300 more clubs this year and the same amount during 2015.
 
Taunton said the recent investment will not speed up the company’s expansion, however, because its growth is funded from the company’s working capital.
 
Snap Fitness has 75 employees at its Chanhassen headquarters and another 325 throughout its corporate stores. Minnesota is home to about 100 of the company’s clubs, the highest concentration of any state.

Related Stories