Investment summary

Fund: Fund IV
Investment theme: Operational improvement
Investment date: August 2002
Exit date: November 2006

Business description

SATS Sports Club ("SATS") is the largest fitness chain in the Nordic region with over 100 wholly-owned clubs in Norway, Sweden, Denmark and Finland. SATS also has an additional four franchise clubs. 

SATS has almost 300,000 members (2011) that have access to the different training services provided. The main customer target group is 20-40 year olds living in the major cities within the Nordic countries.

Customers purchase memberships for a minimum subscription period of 12 months and either pay upfront (pre-paid cards) or monthly via electronic funds transfer (EFT or Autogiro).


24H Fitness Worldwide ("24HFW"), a global fitness chain, was seeking to divest all its non-United States operations after some troublesome years in Europe and Asia. The purpose of the sale was for 24HFW to become completely focused on the American market and subsequently float the company on the stock market. 24HFW was, at the time of the acquisition of SATS, controlled by McCown De Leeuw, a US based private equity firm. 24HFW was acquired by Forstmann Little in Q2 2005.

Nordic Capital was approached in February 2002 by DnB Markets, a Norwegian investment bank, concerning the potential acquisition of 24HFW's Scandinavian operations. DnB Markets had been retained by the original founders of SATS in Norway (Vegard Liven, Björn Sigurd Johansen and Aksel Gresvig) who wanted to find an equity partner to make a management buy-out of the SATS Group.

Investment rationale

In the strategic assessment of SATS, Nordic Capital found the fitness industry to show fundamental growth drivers in the medium to long term from which increased demand is expected. This was emphasised by the fact that limited exercise was the biggest health problem in Europe, there was an increasing demand to place additional responsibility on the employer for health related issues and there were additional tax incentives being implemented.

In this attractive market, Nordic Capital found SATS to have a leading market position. Having been approached by the management team and become their partner it was found that comparable companies had significantly higher EV/EBITDA multiples than what the company was acquired for.

At the time of Nordic Capital's acquisition, SATS had experienced poor financial performance which gave it significant profitability growth potential once a new and strong management team with considerable fitness industry experience had been put in place.

Value added

Nordic Capital developed a detailed operational improvement plan built upon four pillars: club portfolio restructuring, establishing a standardised chain concept, ensuring operational best practice and creating accelerated organic growth. Furthermore, a number of potential add-on acquisitions were identified.

During Nordic Capital Fund IV's period of ownership, the operational improvement plan was well executed. Through these initiatives, SATS enhanced its market position and emerged as the only pan-Nordic fitness chain.

A number of operational initiatives were successfully completed and during Fund IV's ownership, the EBITA margin improved substantially.

Nordic Capital quickly identified an experienced CEO to run the business and he was in position immediately following the acquisition. Nordic Capital was a regular partner to management in on-going strategy discussions as well as in a number of smaller M&A deals.


In December 2006, Nordic Capital Fund IV entered into a binding agreement to divest SATS to Tryg i Danmark smba. Tryg i Danmark smba invests in companies within the health care and security sector and is also the majority shareholder of the TrygVesta insurance group.

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