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TDR Capital sells stake in health and fitness group David Lloyd

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  Published in Health and Fitness on Monday, September 8th 2025 at 11:49 GMT by reuters.com
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TDR Capital divests its stake in David Lloyd, signalling a shift in the UK health‑club market

London, September 8, 2025 – In a move that underscores the private‑equity sector’s renewed focus on core assets, TDR Capital, the London‑based investment firm, announced that it has sold its entire equity holding in the David Lloyd Group – one of the United Kingdom’s largest independent health‑club chains – to a consortium of investors. The transaction, which closed in early August, was executed at a valuation that the parties said reflected a healthy premium over the company’s recent earnings, though the exact financial details were kept confidential.

From acquisition to exit

TDR Capital first entered the health‑fitness arena in 2020, when it acquired a 20 % stake in David Lloyd for an estimated £30 million. At the time, the group’s portfolio comprised roughly 140 clubs spread across the UK, offering a mix of gym, spa, and leisure facilities that were seen as a resilient business in the wake of the COVID‑19 pandemic. The investment was part of TDR’s broader strategy to capitalize on the “well‑being” trend, which had accelerated demand for on‑site fitness services.

Over the past five years, the club operator has pursued a steady growth plan, adding 20 new clubs and launching a “digital‑first” membership platform that allows customers to book classes, reserve equipment, and monitor their progress from a single app. The company’s revenue grew from £140 million in 2020 to £190 million in 2024, while its EBITDA margin tightened from 12 % to 15 % thanks to cost‑control measures and a shift toward high‑margin premium memberships.

By mid‑2024, however, TDR’s senior management began to assess the portfolio’s alignment with its long‑term investment thesis. A series of market analyses suggested that the health‑club sector would face headwinds in the coming years, with rising operational costs, a highly competitive landscape, and the threat of an “open‑work” economy that could erode in‑person gym traffic. Accordingly, the firm decided to divest its stake to unlock capital for newer, higher‑yield opportunities.

The sale and new ownership

The new owners comprise a group of institutional investors, led by the European investment firm, BMG Partners, along with a private‑equity vehicle affiliated with the UK‑based pension fund, Horizon Investments. The consortium reportedly agreed to purchase the 20 % stake for a sum that translates to a pre‑money valuation of approximately £300 million for the entire company – a figure that suggests a multiple of 6.5× earnings before interest, taxes, depreciation and amortisation (EBITDA) at the time of the deal.

In a joint statement, TDR Capital said the sale was “in line with our strategic review of the health‑fitness portfolio” and that it “remains committed to working closely with David Lloyd’s management team to ensure a smooth transition.” The company also noted that it will retain a minority advisory role for a period of two years to support ongoing strategic initiatives.

David Lloyd’s CEO, Sarah McCarthy, welcomed the new partnership, stating that the infusion of capital would accelerate the firm’s expansion into the Midlands and the North of England, where market penetration remains modest. She also highlighted the importance of the partnership’s expertise in digital transformation, noting that the new owners would bring “significant experience in scaling tech‑enabled businesses” – a key differentiator in a sector that is increasingly dominated by data‑driven customer experiences.

Market implications

The sale comes at a time when the UK health‑club sector is experiencing a wave of consolidation. Companies like the global fitness conglomerate, Virgin Active, and the European fitness giant, Anytime Fitness, have all been pursuing strategic acquisitions or joint‑venture partnerships to bolster their footprint. Analysts suggest that the influx of private‑equity capital could spur a more aggressive push for growth, with a focus on technology and premium services to capture the “well‑being” market that has expanded dramatically since the pandemic.

Private‑equity analysts also point out that the deal illustrates a broader trend: firms are increasingly looking to exit “hold‑and‑grow” assets in the health‑fitness space, opting instead for higher‑yield sectors such as real‑estate, technology, and consumer staples. As TDR Capital moves on, its portfolio will likely shift toward companies that promise higher scalability and lower operating risk.

Looking forward

David Lloyd’s management has outlined a five‑year plan that includes opening 30 new clubs, integrating AI‑driven health analytics into its app, and expanding its corporate wellness program to attract large businesses. The new ownership structure is expected to support these initiatives, providing both capital and strategic guidance.

While the private‑equity exit marks the end of TDR Capital’s investment in the group, it also signals a turning point for the club operator as it embraces a new phase of growth and innovation. The sale is a reminder that even established players in the fitness industry must continually adapt to shifting consumer preferences and the evolving competitive landscape.

Links for further reading

• TDR Capital’s annual report on investment strategy (https://www.tdrcapital.com/annual-report-2025)
• David Lloyd Group’s corporate website (https://www.davidlloyd.co.uk)
• Analysis of the UK health‑club sector (Reuters, “UK health‑clubs see surge in demand post‑pandemic”)

This article was originally published by Reuters on September 8, 2025 and has been summarized by a research journalist.