The Nuffield healthcare group snaps up gym chain

Dec 4 2007 by Peter McCusker, The Journal

PRIVATE healthcare company Nuffield Hospitals yesterday snapped up the Cannons gym chain as part of a plan to create a fitness-to-medical treatment empire.

The deal – for an undisclosed sum – comes after a lengthy sale process, with a number of bidders thought to have been in the running, including LA Fitness and Virgin Active.

Cannons, which was put up for sale last year, was recently reported to be worth around £200m, far short of the £360m it fetched when sold in a management buyout six years ago, backed by Royal Bank of Scotland and PPM Capital.

Not-for-profit organisation and charity Nuffield said it financed the deal by extending its corporate borrowing facility.

It adds the 52-strong Cannons chain to its existing corporate gym operation, launched after it bought Sona, which runs in-house gyms for big companies, in 2005.

David Mobbs, Nuffield Hospitals chief executive, said the business hoped to create a fitness offering which could draw on the knowledge of its medical experts to create tailored gym programmes to help improve health.

He added: “People want to take a more active role in maintaining and promoting their own health. They have an increasingly sophisticated view of what services they want to help them stay fit and healthy as well as to look after them when there are problems.

“We are responding to that by providing the services people want.”

Cannons has 172,000 members and employs 3,500 people. It made £109m in turnover last year, bringing the combined annual group turnover to around £600m.

Nuffield was founded 50 years ago and has more than 100 hospitals across the UK – including one in Newcastle and one in Stockton – receiving one million patient visits a year.