Dominic Walsh
 
 
 
Fitness First, the world’s biggest health club operator, is to find up to £70 million in an equity fundraising to finance an accelerated expansion programme in countries including India and Russia, The Times has learnt.
The company, which is controlled by the private equity firm BC Partners, is also expected to announce tomorrow that it has signed a deal with Bupa to offer free or discounted club memberships to those taking out private medical insurance with the healthcare group.

 
 
The fundraising comes as Fitness First is planning to lift the number of club openings from 43 last year to between 50 and 70 this year, although that could increase further if it makes any acquisitions.

As well as adding clubs in the 17 countries in which it operates already, the company will open its first club in India and has held discussions with several existing operators in Russia with a view to buying an entry into the market.

Colin Waggett, chief operating officer, said that the first club in India would open in late summer, with a target of 15 to 20 over three years. “We believe there is the capacity for 100 or more clubs in India,” he said.

He said that the fledgeling Russian market also looked to have good potential, although an acquisition rather than greenfield development would be its preferred mode of entry, probably in 2008.

In the UK, which accounts for 177 of its 492 clubs, the group expects to open as many as seven this year, up from three in 2006, to take advantage of improved trading. “We are in better shape than for many years,” Mr Waggett said, adding that the January trading period was “looking very strong”.

To fund its expansion, the group is raising between £50 million and £70 million from existing shareholders by way of a rights issue. BC Partners, which led the £835 million purchase of Fitness First from Cinven 16 months ago, speaks for 83 per cent of the shares. Management holds the rest.