New owner Norbrook to develop Express Fitness into regional brand
Norbrook Equity Partners has acquired the Express Fitness chain of gymnasiums from the Clarke family, with plans to grow the business into a Caribbean operation.
The investment holding firm has taken a 70 per cent stake in the gymnasium, and is considering expansion and upgrades in the Jamaican market that would require initial outlay of about $300 million, but has not disclosed the acquisition price.
There were reports back in December of pending changes to the management of the gymnasium, but Executive Chairman of Norbrook Equity Khary Robinson only disclosed the acquisition this week. Under the deal that closed on January 1, the Clarkes retain the other 30 per cent of the business that they founded and launched about seven years ago.
On the face of it, the fitness chain appears to be an odd fit for Norbrook, a diversified company that was focussed on courier services in its early period. The same could also be said for the landscaping business it owns.
Robinson said Norbrook’s strategy is to tap into growth industries, and that the acquisition of the fitness clubs makes sense when viewed from that perspective.
Over time, Norbrook's business holdings have grown from courier services – a division that Robinson built by gobbling up rival firms – to include transportation, ecommerce logistics, bottled water and landscaping.
“Our business focus is to identify companies that are well positioned for growth and acquire or invest in them with the goal of using our strategic relationship, capital resources, operating expertise and strategic insight to grow the business. We grow all our businesses through a mix of acquisitions and organic initiatives. Express will be no different,” said Robinson.
“We see the opportunity to leverage the brand and infrastructure and turn it into the Caribbean’s leading provider of health and wellness solutions through acquisitions and strategic initiatives.”
Express Fitness has 11 locations, spread across Kingston, Portmore, Mandeville, Montego Bay and Savanna-la-Mar. Norbrook plans to open at least four new centres, with “two acquisitions already lined up” in the Jamaican market; and will be setting up gyms in three Caribbean markets by midsummer 2020.
“Whether through acquisition or the set-up of new facilities, our aim is that Express will have a fitness solution in Bahamas, Barbados and Trinidad in the next 18 months. Our model has worked well in Jamaica and while we will continue to expand here, our ultimate goal is a regional network of fitness facilities and services,” said Robinson.
Founded by Ansel Clarke and his wife, Express Fitness has grown to become one of the most popular gyms for fitness buffs and weight watchers.
The gym first opened to members in 2012. The Clarkes have long been planning to grow the clubs across the Caribbean, and were initially working with a timeline of mid-2014 to enter at least two markets, including the Bahamas, according to past Financial Gleaner reports.
The Clarkes now see a path to achieving that goal.
“We quickly identified a significant opportunity for the company to expand throughout Jamaica and the Caribbean, but knew we needed the right partner to realize the potential. After spending meaningful time with the team at Norbrook and seeing how well they operated their other businesses, we decided to accept their offer and partner with them going forward,” said Ansel Clarke in a joint statement with Norbrook released on Wednesday.
The Clarkes are said to have sold the business because they needed to migrate for personal reasons.
Robinson began eyeing Express Fitness initially as an acquisition target back in 2017. Norbrook then reached out to the Clarkes with a proposal that would see Robinson’s company leveraging the Express Fitness brand to set up what the chairman called “a regional wellness platform” that would include fitness centres, concept gyms, nutrition centres and other wellness solutions.
Robinson is moving quickly to put the regional plan in play. But as the new owner for just two months, he said, it was too early to spell out the full investment programme.
“We are early in the business and so we are assessing our additional investment on an as needed basis,” said the Norbrook chairman.
“As it stands now, we plan to open at least four new clubs and have two acquisitions already lined up. Those initiatives will require at least $300 million of additional investment, which is over and above any enhancement we will be making to existing locations.”
Express Fitness CEO Adrienne Harper who has run the business for the past five years will retain that position. But: “That said, the Norbrook team is very involved in all its businesses and so direction of the business will be supported by myself and Norbrook Group CEO, Garth Pearce,” said Robinson.
Outside of Jamaica, the Norbrook group already has footholds in Jamaica, Florida and West Africa. Its businesses include courier and ecommerce company Mailpac, a private transaction processing company ePay, icemakers and distributors Pure National and Happy Ice, the local Hertz car rental franchise, and water supplier JamAgua, among others.
Robinson is the principal shareholder in Norbrook.
"Norbrook is owned by me today … but that could change in the future depending on the strategic direction we decide to take,” he said. That future direction could entail going public and listing on the stock market or taking on private partners.
“The reality is that we have only grown as fast as I could afford for us to grow so taking in outside investment – private or public – is something that always comes up.”