31 Jan 2020
David Lloyd Leisure acquires German operator Hamburg Meridian
BY Tom Walker
David Lloyd Leisure (DLL) has acquired the Hamburg Meridian Group, which operates eight premium health and spa clubs in Germany.
The deal comes 18 months after DLL bought its first German club – in Bad Homburg in 2018 – and is "the next step" in the company's ambitious plans to expand further into the German market and across Europe.
The eight Meridian clubs currently have nearly 39,000 members between them, bringing the total number of members across the DLL portfolio of clubs to 660,000.
DLL plans to invest more than €20m (£17m) in the clubs to further develop their premium wellness offer.
The deal will see Hamburg Meridian's managing partner Leo Eckstein – who has managed the Meridian Group for 20 years and has also been co-owner since a management buy-out initiated by him at the beginning of 2007 – selling his shares to DLL.
Eckstein is credited for picking up the ailing Meridian Group in 2000 – with three clubs and 13,000 members – and transforming it to its current size with eight clubs and nearly 39,000 members.
In 2017 Eckstein, who is 61 years old, announced that he wanted to place the management of the company in younger hands and has since then systematically trained a new, younger management team with Christin Lüdemann (45) and Andre Nagel (43), who now manage the operative business independently.
Eckstein will continue to oversee the transition until March 2020, when he will retire from the management. He will then continue to act as a consultant on an ongoing basis to support DLL’s future expansion plans.
In December 2014, Eckstein oversaw a deal for AF Eigenkapitalfonds für deutschen Mittelstand GmbH & Co. KG, advised by Munich-based AFINUM Management GmbH, to invest in the Meridian Group with the aim of financing the construction and start-up of the new Frankfurt Skyline Plaza and Hamburg-Barmbek facilities.
The investment strengthened Meridian's position as the German market leader in the premium club segment.
In the five years since its entry, both the Group's sales and earnings have increased significantly. AFINUM is now passing on its stake to DLL.
With the sale to DLL, AFINUM and Eckstein expect "a successful continuation of Meridian Group’s development and a further expansion of it’s leading market position in the premium segment in Germany".
Glenn Earlam, chief executive of DLL, said: “The Meridian Group is a strong and well-respected operator in the German health and fitness industry, and is a key strategic acquisition for David Lloyd Leisure.
"We have ambitious plans to further invest in and further develop the clubs, and look forward to meeting the Meridian members and team, and sharing our vision for the future.
"There is a high demand for premium spa and fitness clubs in Germany and so it is an attractive market for us to expand into, as has been demonstrated by the success of our first club in Bad Homburg near Frankfurt. We continue to look for further opportunities to expand the David Lloyd Leisure concept across Germany.”
Leo Eckstein, Meridian Managing Partner/CEO added: "With AFINUM as an always responsive sparring partner with a great understanding for the needs of a medium-sized company, we have succeeded in gradually but persistently aligning our organization to new opportunities and challenges in the market.
"In combination with the positive effects of the successful expansion, we have significantly increased turnover, result and cash flow in recent years and hand over a very healthy and future-oriented company".
• For a full interview with Glenn Earlam, look out for the HCM March issue
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