Recent Large Fitness Acquisitions Bode Well for M&A in 2016

Recent Large Fitness Acquisitions Bode Well for M&A in 2016

In 2015 the health and fitness industry saw several acquisitions of large industry suppliers. These acquisitions appear to reflect a growing trend: a serious and escalating strength in the M&A environment for health and fitness related businesses from both strategic and financial buyers alike.

In July, Life Fitness, a division of the Brunswick Corporation (NYSE: BC), announced that it had acquired  SCIFIT Systems, Inc., a manufacturer of fitness equipment for seniors and patients undergoing rehab therapy.  Then, a few weeks later, Amer Sports (NASDAQ Helsinki: AMEAS), the corporate parent of Precor, Inc., announced it had acquired Queenax, a leading provider of functional training systems in Italy.   Then in January 2016, Life Fitness announced that it had acquired Cybex International for $195 million.

These three acquisitions were among the largest M&A transactions involving fitness equipment manufacturers in recent years—and they got everyone curious about not just the firms involved, but also about the general trends in the health & fitness industry, what they suggest about the mergers and acquisition (M&A) environment, and the likely impact for equipment buyers.

From our perspective, these acquisitions confirm what we are hearing from our registered buyers.  There is an escalating strength in the M&A environment in the health, fitness and leisure industry. According to the 2015 M&A Outlook Survey Report published by KPMG, the health and fitness industry is one of the hottest sectors in the related healthcare market.  As a result, we expect 2016 to bring additional large acquisitions on both the equipment supply side and on the equipment buying side.  This increase in demand also suggests that valuation multiples will rise slightly in 2016 as well.

To learn more, read the full article in the February issue of CBA called “A Supply-Side Story”.

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