Oaktree, Navis Capital Put Plans to Sell Asia Fitness Business on Hold-Sources

U.S. investment firm

Oaktree Capital


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Management LLP and its partner have put on hold plans to sell a network of gyms and health clubs in Asia as the process drew little interest due to high valuation, people familiar with the process said.

Oaktree Capital and Navis Capital Partners Ltd., an Asia-focused private-equity firm, had put the Asia wellness business, including the popular Fitness First Clubs, up for sale earlier this year and were expecting to raise as much as $1 billion, which bidders felt was too high, the people said.

Oaktree Capital and Navis combined their wellness businesses in the region in 2017 to create Evolution Wellness Holdings Pte.

Evolution Wellness says its network of almost 170 health clubs—with 370,000 members in markets including Hong Kong, Singapore, Thailand, Malaysia and Indonesia—is one of the largest in Asia.

Its brands include Fitness First and Celebrity Fitness, which was owned by Navis before the merger.

With the possibility of an outright sale looking bleak now, one of the people said the companies are now planning to tap the equities market through an initial public offering.

The owners are planning to list Evolution Wellness in Thailand next year, one of the people said. The size of the offering is yet to be finalized.

While demand for wellness services in Asia has been growing thanks to rising middle-class incomes, especially in major cities where consumers are increasingly willing to pay for gym memberships and yoga classes, competition has been intensifying in the region.

In December 2017, Hong Kong-based gym chain Pure Group, which operates the Pure Yoga and Pure Fitness centers in locations such as New York and Singapore, received investments from Hong Kong private-equity firm FountainVest Partners and Canada’s Ontario Teachers’ Pension Plan. People familiar with that deal said Pure Group was valued at $400 million.

Oaktree Capital, based in Los Angeles, has $119 billion in assets under management as of March, while Kuala Lumpur-based Navis Capital manages $5 billion in public and private-equity funds.

Write to P.R. Venkat at venkat.pr@wsj.com and Yantoultra Ngui at yantoultra.ngui@wsj.com

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