TPG Growth Backs Club Pilates Amid Private Equity Fitness Push

(Bloomberg) -- TPG Growth, the fund that's backed companies including Uber Technologies Inc. and Airbnb Inc., took a stake in Club Pilates, the biggest chain of Pilates studios in the U.S., as it aims to invest in more health and wellness businesses.

Club Pilates will use the capital from TPG to expand beyond its 475 locations in 35 states, owner and Chief Executive Officer Anthony Geisler said in an interview. He will stay on as CEO and retain a stake in the company. Financial terms of the transaction weren't disclosed.

TPG is capitalizing on the growing interest in health and wellness, joining firms such as L Catterton, North Castle Partners and Falconhead Capital. Affluent consumers continue to show interest in a range of products, services and events promoting healthy lifestyles, notably in a range of fitness concepts like SoulCycle and Barry's Bootcamp. 

The deal was led by TPG's Mark Grabowski, who joined the San Francisco-based firm last year from L Catterton, where he worked on fitness deals including Peloton, CorePower Yoga and Pure Barre. TPG already owns a stake in gym operator Life Time Fitness, which it took private in 2015 with Leonard Green & Partners in a deal valued at more than $4 billion. In 2014, TPG Growth invested in Angie's Artisan Treats, a maker of healthy snacks.

“Health and wellness is one of those megatrends that I've been focused on, trying to find all the angles,” Grabowski said in an interview. “Fitness is a core vertical within that.”

Geisler became CEO of Club Pilates after he purchased the company in 2015. He previously owned LA Boxing, a franchise concept he sold to UFC Gym in 2013. He said the deal with TPG will fuel his expansion plans, which calls for Club Pilates to open 200 more studios this year and sell 350 more to franchisees.

“This year is a big inflection point,” he said.

Lower Cost

Pilates, which uses equipment called a reformer, draws about 8 million participants in the U.S. each year, but sessions have traditionally been private and cost upward of $100 each. At Club Pilates, studios have about a dozen reformers for classes. The most popular package, Geisler said, is an unlimited option that costs $159 to $199 per month.

Investors have wrestled with how to back fitness companies as they gauge what may remain popular for a long period of time, as well as whether bare-bones, discount workout facilities or high-ticket boutique concepts are better bets. Club Pilates is aiming to galvanize a fragmented market by bringing the Pilates concept to more people at relatively affordable prices.

“It's democratized access to a premium brand, which is rare in fitness,” Grabowski said.

TPG, the private equity firm founded by David Bonderman and Jim Coulter, created TPG Growth in 2007 to back companies at earlier stages than was typical for a traditional leveraged-buyout fund. Headed by Bill McGlashan, TPG Growth has about $8.3 billion in assets under management. TPG oversees about $72 billion across private equity, credit, real estate and hedge funds.

To contact the reporter on this story: Jason Kelly in New York at jkelly14@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Devin Banerjee