Australian private equity firm Quadrant is quietly exploring the sale of its fitness and lifestyle portfolio company, marking a significant move in the wellness sector as we head into the final quarter of 2024. Industry sources close to the matter reveal the PE firm has begun reaching out to potential buyers, hoping to capitalize on the post-pandemic fitness boom and growing investor interest in wellness brands.
The company, which houses several popular fitness and lifestyle brands under one umbrella, has reportedly experienced substantial growth since Quadrant’s acquisition. Market analysts estimate the business could command a valuation between $300-350 million, representing a healthy multiple of approximately 10-12x EBITDA.
“The fitness industry has demonstrated remarkable resilience,” notes Sarah Chen, senior market analyst at Morgan Stanley. “Premium brands with strong digital integration are particularly attractive acquisition targets in the current market, especially those showing consistent growth trajectories.”
The sale process comes amid increasing private equity activity in the wellness and lifestyle sector. According to data from PitchBook, PE investments in fitness and wellness companies increased by 28% in the first half of 2024 compared to the same period last year, with total deal value exceeding $3.8 billion globally.
Quadrant’s decision to divest follows a successful period of operational improvements and strategic acquisitions that have significantly enhanced the group’s market position. Under Quadrant’s ownership, the fitness group expanded its footprint across Australia and New Zealand while developing robust digital capabilities that proved critical during pandemic disruptions.
“What makes this particular asset interesting is its balanced revenue model,” explains Michael Torres, partner at Deloitte’s Consumer Business practice. “They’ve effectively diversified beyond traditional gym memberships into high-margin product lines, digital subscriptions, and branded wellness experiences. This multi-channel approach provides stability that pure-play fitness operators simply don’t have.”
Financial documents shared with potential buyers highlight impressive membership growth rates of approximately 15% year-over-year and digital revenue streams that now account for nearly 30% of total earnings. The company has also maintained strong customer retention metrics, with average member tenures exceeding industry standards by roughly 40%.
The Australian fitness market has undergone significant consolidation in recent years. Industry research firm IBISWorld reports that the top five operators now control approximately 65% of market share, up from 48% in 2019. This consolidation has created favorable conditions for premium operators with distinctive brand positioning.
Quadrant has reportedly engaged Goldman Sachs to manage the sale process, with first-round bids expected by early December. Sources familiar with the matter suggest interest has already emerged from several strategic buyers, including international fitness conglomerates looking to expand their Asia-Pacific presence, as well as competing private equity firms specializing in consumer brands.
“This isn’t just another gym chain changing hands,” says James Warburton, fitness industry consultant and former executive at Virgin Active. “The group has successfully positioned itself at the intersection of fitness, lifestyle, and wellness—categories that continue to benefit from secular growth trends driven by health consciousness and preventative care priorities.”
The fitness industry’s valuation metrics have evolved considerably post-pandemic. While traditional gym operators typically trade at 6-8x EBITDA, premium lifestyle brands with significant digital components can command multiples of 12-15x or higher. This valuation premium reflects investors’ growing recognition of the resilience and scalability of digitally-enabled wellness platforms.
According to a recent Ernst & Young report on consumer health trends, over 60% of fitness consumers now engage with brands across multiple channels, including in-person facilities, mobile applications, and e-commerce platforms. This omnichannel approach has become increasingly valuable to investors seeking businesses with multiple growth levers.
Quadrant’s exit timeline aligns with typical private equity holding periods, having owned the fitness group for approximately five years. During this time, the firm implemented significant operational improvements, including centralized marketing functions, enhanced data analytics capabilities, and the launch of several complementary product lines that increased average revenue per member.
The Australian Financial Review has reached out to Quadrant and Goldman Sachs for comment, but both declined to provide statements regarding the potential transaction.
For potential buyers, the opportunity represents a chance to acquire a business with significant growth runway in both domestic and international markets. The fitness group’s proprietary technology platform, which manages everything from membership data to personalized fitness programming, provides a scalable foundation for continued expansion.
As consumer spending on health and wellness continues to outpace broader retail categories, premium fitness brands remain attractive acquisition targets despite macroeconomic uncertainties. With its diversified revenue streams and strong brand equity, Quadrant’s fitness portfolio appears well-positioned to command a premium valuation in the current market environment.
