Virgin Active raises R1.8bn, buys real foods health chain

Virgin Active Holdings has raised R1.8 billion from backers, including billionaire Christo Wiese, and will expand with the acquisition of the nutrition assets of South Africa’s Real Foods Group.

The UK health chain, part-owned by Richard Branson’s Virgin Group and private equity firm Brait SE, plans to create a combined fitness and nutrition company, according to a statement on Friday. Dean Kowarski, 52, who founded Real Foods in Cape Town in 2013, will become CEO of the enlarged company.

Read the full announcement from Sens here.

Wiese, 80, who made his fortune mainly in retail, is now cash rich after a multi-billion rand compensation payout from Steinhoff International Holdings NV, which nearly collapsed amid an accounting scandal late in the year. 2017. Will contribute £50m to Virgin fundraising

“Now we have the opportunity to combine our skills to offer a complete health offering around exercise and nutrition,” said Kowarski. “The additional investment in the business strongly positions Virgin Active to deliver long-term growth.”

While the Covid-19 pandemic has caused gyms to struggle amid lockdown rules and social distancing, the industry is recovering, helped by many people’s focus on healthier lifestyles. That creates “significant growth potential” for the combined group, Virgin Active said. The deal values ​​Real Foods at £28.6m.

Virgin Active has more than 230 clubs and around 1 million members worldwide, while Real Foods owns 204 locations with brands like Kauai, many of which are already in Virgin gyms.

Brait, the majority owner of Virgin, announced a plan to sell all assets by the end of 2019 following a review. A sale of Virgin Active, which represents almost half of its value, was delayed due to the pandemic. The company was forced to close outlets in South Africa and the UK for long periods due to coronavirus lockdowns.

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Brait has said he will update investors on initial public offering plans for his Premier Foods unit in South Africa this year. The company hired Ethos Private Equity to manage its portfolio following the 2019 restructuring.

Shares of Brait plunged in Johannesburg on Friday, down 8.35% to R3.95 at 11:45.

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