By Patty Tascarella – Senior Reporter, Pittsburgh Business Times
Tecum Capital Partners has invested in Bandon Holdings, based in Austin, Texas, and the largest franchisee of Anytime Fitness.
Wexford-based Tecum provided subordinated debt and equity to support Fireman Capital Partners’ acquisition of Bandon. Terms of the transaction were not disclosed.
Bandon, which launched in 2012, has 38 gyms across Texas, Oklahoma and Kansas. Anytime Fitness, founded in 2002 and headquartered in Woodbury, Minn., has 4,000 fitness centers in 30 countries.
Stephen Gurgovits Jr., Tecum managing partner, said the deal appealed for several reasons, including partnering with FCP, a private equity firm based in Waltham, Mass., whose present investments include Dunn’s River Brands and Idea Paint and whose realized investments include Hudson Jeans and Serena & Lily.
“They [FCP] have an expertise in both consumer growth and franchise-oriented businesses and, importantly, they have a very successful track record and deep bench of operational expertise,” Gurgovits said. “Second, the existing management team was rolling over some proceeds from the sale and staying with the business. The Bandon team wanted some capital partners to help them grow, and I think they found the right combination. Further, the Anytime Fitness brand is one of the fastest-growing gym franchises in the world and their 24-hours-a-day model is very appealing. We believe the consistency of the cash flows makes this a very attractive investment with the upside opportunity coming via more acquisitions.”
The game plan is to acquire smaller franchisees with a focus on owners with one to three locations, mostly in adjacent areas.
“While there could be opportunities in Pennsylvania, the real synergies come from our existing management team in Texas and that doesn’t translate as well, when you stretch too far geographically,” Gurgovit said. “Besides, I belong to the single best cross-fit gym in the world, right here in Pittsburgh — R.A.W. — and I would hate to have to compete against them, so we will probably avoid Pennsylvania.”
Anytime lists 17 locations in the Pittsburgh metro plus three more that are opening soon, in Brentwood, Pittsburgh’s South Side neighborhood and Baden, Beaver County.
Tecum raised a $240 million Small Business Investment Co. fund last year, meaning it can leverage matching funds on a two-to-one basis from the U.S. Small Business Administration. It has now invested about $90 million in nine companies, “which is a really nice start for our team,” Gurgovits said.