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Vision Leisure (ASX:VVA) has acquired a 25% stake in and three Queensland locations of World Gym Australia (WGA).
Coming in at just under $17 million ($16.7M), Viva has now inked its second largest acquisition fully funded through cash, ‘banking facilities,’ and $1M Viva shares.
Viva, for its part, expects “substantial financial and strategic benefits.”
On Tuesday, Viva issued revenue guidance of over $56M for Q4 of FY25 and full-FY24 revenue of $163.6M. Full year earnings before costs are anticipated to clock in at $35.4M.
WGA has branding opportunities for Viva – it expects to be able to tap new demographics, citing its ‘big box gym’ build.
It also allows the company to penetrate further into the Queenslandian market.
“Acquisition of three World Gym locations (Stafford, Coomera, and Underwood) enhances Viva’s presence in Queensland and provides a scalable platform for growth,” Viva wrote on Tuesday.
But most of all, Viva would like to implement its recurring payments subscriptions among WGA’s existing users.
A ‘member management platform’ called The Hub will be delivered along side products ‘Viva Pay’ and ‘Viva Pass.’ All cards in order, once all of this is in place, Viva says it will be the ‘largest’ fitness network in Australia.
“With a pipeline of over 100 additional corporate and franchisee network locations already secured, the existing Viva network is expected to expand to over 583 locations, with a membership base across exceeding 587,000 members, underscoring the scale and reach of our growing fitness community,” VVA CEO Harry Konstantinou said.
Around 10.40am Sydney time on Tuesday, Viva shares were up 2.63% to $1.36/sh on a market cap of $137.8M.
The company has 100M shares on issue; average four week turnover is for 135,835 shares and the value of shares traded hands in the first hour of trades on Tuesday morning reflected only $3,250.
VVA last traded at $1.33/sh.
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