New clients for Addleshaws and Hogan Lovells on £50m Gym deal

Addleshaw Goddard, Eversheds, Hogan Lovells and Travers Smith have advised on Phoenix Equity Partners’ £50m investment in low-cost gym operator The Gym.

The business was previously owned by Bridge Ventures, which first invested in the company in 2007 and has retained a 25 per cent shareholding. Phoenix has acquired a 55 per cent equity stake in the company, giving the Gym £50m of capital to fund its future development.

Stuart Brinkworth
Stuart Brinkworth

The group also plans to speed up its expansion to around 20 to 30 new gyms per year. It opened its first gym in 2008 and now operates 36 across the UK.

Addleshaws private equity partner Mike Hinchliffe led for Bridges alongside tax partner Elaine Gwilt and corporate associates Marc Field and Zulon Begum.

Phoenix was advised by an Eversheds team headed by private equity partner James Trevis assisted by corporate partners Antony Walsh, finance partner Patrick Davis, company commercial partner Jon Cox-Brown and employment partner David Beswick, as well as associates Theresa-Marie Stodell, Jamie Smith and Sam Bhachu.

The private equity house also instructed Travers Smith for tax advice, with partner Russell Warren leading.

Hogan Lovells advised Phoenix’s two separate lenders, with banking partner Stuart Brinkworth, senior associate Gert Raig and associate Julie Ngov acting for Proventus Capital Partners as unitranche provider. A distinct team led by banking partner Paul Mullen on the other side of a Chinese wall guided HSBC as super senior revolving credit facility provider.

HSBC’s line-up was led by Andrew Mantle, senior director of leveraged finance.

Background to this deal:

Addleshaws’ mandate from Bridges was the firm’s first deal for the client and followed an informal pitch process.

Eversheds and Travers are both established advisers to Phoenix, with the latter advising on a number of deals including the £75m acquisition last year of flow control product maker Gall Thomson Environmental from Lupus Capital, on which partners James Renahan and Edmund Reed led.

The Gym deal demonstrates the increased use of non-bank lenders to finance deals. Hogan Lovells has a strong footprint in the area, acting for alternative credit provider Ares since it was set up in Europe, while both Freshfields Bruckhaus Deringer and Linklaters have made pushes in the discipline recently (3 August 2012). Brinkworth’s role on the latest deal is a new instruction for the firm from Proventus and came following a recommendation from Phoenix, with which the banking partner has existing ties.