4 March 2022
CEO Appointment and Acquisition
• Dean Kowarski, founder of The Real Foods Group, appointed as Group CEO of Virgin Active
• Existing and new shareholders to invest £88.4 million to fund future growth opportunities
• Virgin Active acquires the nutrition assets of The Real Foods Group to create a combined fitness and nutrition group.
Virgin Active today announces that Dean Kowarski, founder of The Real Foods Group, has been appointed Group CEO of Virgin Active with immediate effect.
Dean started the Real Foods Group in 2013 and acquired the Kauai business in 2015 and has subsequently grown the business from 100 stores to 204 stores. Dean has been active in, and has an in-depth understanding and passion for, the health and wellness space for many years. He also has had a close association with the Virgin Active business.
Matthew Bucknall, who had previously announced his intention to retire 25 years after co-founding the business, will step down as CEO. He will remain as a special adviser to the Board and as a Non-Executive Director of Virgin Active Italy.
The company is also announcing an internal promotion today. Mark Field, currently Managing Director of Virgin Active South Africa, will become Group CFO. He will take up this position once a new MD for Virgin Active South Africa has been appointed.
The existing shareholders of Virgin Active, Brait and Virgin Group, will be investing an additional £20.2 million in the business. In addition, certain of the members of the investor consortium in Real Foods will invest GBP18.2 million and Titan Premier Investments (Pty) Limited (“Titan”), an investment vehicle of Christo Wiese, will invest GBP50.0 million to become new shareholders in Virgin Active.
The new capital will be used to support the business’ ongoing recovery and to accelerate future growth. This will include investing in existing physical spaces, developing new product and service offerings, embracing digital and cutting-edge technologies and pioneering new innovations to improve customer experience and increase member engagement.
Virgin Active also separately announced that it has acquired the nutrition assets of The Real Foods Group for GBP28.6 million. This acquisition is subject to a number of conditions precedent, including regulatory approvals, and is anticipated to be implemented in the second quarter of this year. Upon implementation, the Real Foods Group nutrition assets will be combined with Virgin Active to create a wellness group.
The pandemic has accelerated people’s appetite to lead a healthier lifestyle, and consumer demand is forecast to rise for the foreseeable future, creating significant growth potential. To support this demand most effectively, both foundations of wellness – fitness and nutrition – need to be addressed. A combined approach has the power to guard against preventable diseases and create a healthier society.
The Real Foods deal combines leaders in both the fitness and nutrition fields. Virgin Active is a global leader in the Health Club sector. Since it opened its first club in 1999, it has grown to over 230 clubs, with close to a million members employing over 25,000 people across eight countries. In 2019, before the pandemic, Virgin Active delivered its best year with record EBITDA of £142m.
Real Foods is a multi-brand food group committed to natural food, innovation and social responsibility. Real Foods was founded by Dean Kowarski and operates 204 sites under brands including Kauai and NÜ Health Café and employs over 2500 people across 6 countries. It has also successfully been operating its store-within-a-store concept throughout Virgin Active’s sites in South Africa for 18 years, in addition to its standalone and franchised sites.
After implementation of the Real Foods acquisition, Virgin Active and Real Foods will operate with a shared vision, under the guidance of a single leadership group, which will help create opportunities and commercial efficiencies to build a broader wellbeing offering. It will enable the group to align fitness and nutrition around a single goal and provide shared data and personalized nutrition in concert with curated, accessible exercise programs. This will allow members and customers to realise their health goals more effectively and sustainably which, in turn, will drive membership growth and retention.
Dean Kowarski, Group CEO of Virgin Active, commented:
“This is an incredibly exciting moment for Virgin Active and The Real Foods Group. Both brands have been pioneers in their respective wellness fields, building local and international reputations for excellence. On the back of today’s transaction, we now have the opportunity to combine our skills to deliver a complete health offer around both fitness and nutrition so that our members can meet their health goals more successfully. This, alongside the additional investment in the business, positions Virgin Active strongly to deliver growth over the long term.”
Matthew Bucknall, Co-founder and retiring CEO of Virgin Active, added:
“It has long been our strategy to complete the virtuous circle of exercise, diet and health for our members. Combining Virgin Active’s leadership in exercise experience with Real Foods proven expertise in nutrition creates a very credible and compelling offer. Virgin Active is now ideally placed to support the ever-growing demand for healthier lifestyles. I have worked closely with Dean and the Real Food Group for many years and have every confidence in the success of the combined business.”
Simon Susman, Chairman of Virgin Active, said:
“Today’s announcements are an important next step for Virgin Active as we capitalise on positive health trends around the world. We are delighted to welcome Dean Kowarski as CEO. He has a strong track record at Real Foods and our two businesses have worked well together for many years. At the same time, I would like to thank Matthew for the enormous amount that he has achieved in his 25 years at Virgin Active. His ongoing experience as an adviser to the board will be invaluable.”
UK Media Teneo Ben Foster +44 7776 240 806