TSG Consumer Partners Acquires EōS Fitness in $1.5 Billion Strategic Move

In a landmark transaction reshaping the budget fitness landscape, TSG Consumer Partners has acquired fast-growing gym operator EōS Fitness for $1.5 billion including debt, positioning the combined entity to capitalize on surging demand for affordable wellness solutions[1][4]. The May 12, 2025 deal marks TSG’s latest play in its decade-long fitness sector dominance, following successful investments in Planet Fitness and CorePower Yoga[1][5]. With EōS surpassing 1.5 million members and targeting 250+ locations by 2030, the acquisition underscores private equity’s intensified focus on scalable gym models combining low-price accessibility with premium amenities[4][5]. The transaction occurs amid a flurry of fitness sector consolidation, including Leonard Green & Partners’ April 2025 Crunch Fitness buyout and Princeton Equity Group’s January 2025 investment in Barry’s Bootcamp[6][12].

Transaction Overview and Strategic Rationale

Deal Architecture and Valuation Drivers

The all-cash transaction values EōS at 8.2x its projected 2025 EBITDA of $183 million, reflecting premium multiples for gym chains with corporate-owned real estate portfolios[4][5]. TSG’s acquisition from seller BRS & Co. includes assumption of $650 million in existing debt, with Piper Sandler and Robert W. Baird advising EōS on financial structuring[1]. The deal’s 32% premium to EōS’ 2024 valuation stems from the chain’s 22% compound annual growth rate since 2020 and industry-leading 91% membership retention rate[5].

TSG’s Fitness Sector Playbook

TSG brings operational expertise honed through Planet Fitness’ 2012-2018 growth phase, where it helped scale locations from 400 to 1,500+ while maintaining <$10 monthly pricing[1][5]. The firm’s “Capital Light, Experience Rich” strategy targets gym operators with corporate-owned footprints enabling quality control, contrasted with franchise-heavy models like Crunch Fitness’ 85% franchised network[6][8]. TSG Managing Director Adam Hemmer emphasized EōS’ “company-owned model enables best-in-class operations across locations,” critical for maintaining $9.99 entry pricing while delivering saunas, cold plunges, and social media studios[1][4].

EōS Fitness: Business Model and Growth Trajectory

Differentiated Value Proposition

EōS’ High Value-Low Price® (HVLP) model combines 45,000 sq.ft. facilities with experiential amenities typically found in boutique studios[1][4]. Members gain access to hydrotherapy zones, 120+ weekly group classes, and dedicated “Content Zones” with ring lighting for social media posts – features that drove 41% higher engagement versus industry averages in 2024[4][5]. The chain’s “Cleanliness Guarantee” program, featuring hourly antimicrobial fogging, addresses post-pandemic hygiene concerns while reducing member cancellations by 18%[1].

Geographic Expansion Strategy

With 87% of locations in Sun Belt markets, EōS leverages demographic tailwinds from the South’s 14% population growth since 2020[4][5]. The company’s 2024 entry into Utah and Georgia marked its first expansion beyond core states, with TSG planning to deploy $200 million for 30+ new gyms in Nashville, Raleigh, and San Antonio through 2026[1][5]. EōS CEO Rich Drengberg noted the chain’s real estate strategy prioritizes former big-box retail spaces, securing 15-year leases at $9-$12/sq.ft. – 60% below pre-pandemic rates[4].

Leadership Continuity and Post-Acquisition Strategy

Management Incentive Alignment

Drengberg’s continued leadership, coupled with a 12% equity rollover, ensures stability during the ownership transition[1][4]. TSG structured management incentives around three key metrics: achieving 95% occupancy at new locations within 6 months, maintaining <2% monthly churn, and delivering 15% annual EBITDA growth through 2027[5]. The PE firm will implant two operating partners – including a former Planet Fitness COO – to optimize EōS’ supply chain and membership pricing tiers[1].

M&A as Growth Accelerant

With $500 million earmarked for acquisitions, TSG plans to consolidate regional gym chains in the Midwest and Northeast[4][5]. Potential targets include 30-50 location operators with similar HVLP positioning, leveraging EōS’ scaled back-office infrastructure. This mirrors Leonard Green’s strategy with Crunch Fitness, which completed 8 regional buyouts in 2024 to reach 500+ locations[8][9].

Broader Private Equity Momentum in Fitness

Market Segmentation Strategies

Investors are deploying capital across fitness tiers: TSG and Leonard Green in budget/low-cost (EōS, Crunch), L Catterton in premium (Solidcore), and Princeton Equity in boutique (Barry’s)[6][12][16]. The bifurcation reflects post-pandemic consumer trends – Value gym memberships grew 9% YoY in Q1 2025, while boutique studios saw 22% revenue growth from hybrid virtual/in-person offerings[14][17].

Operational Value-Creation Levers

PE firms are driving profitability through technology integrations and daypart optimization. Crunch Fitness under Leonard Green introduced AI-powered equipment that reduces staffing needs by 15%, while Barry’s Bootcamp uses dynamic pricing to fill 78% of off-peak slots[8][14]. For EōS, TSG plans to implement facial recognition check-in systems and demand-based locker pricing – initiatives projected to boost margins by 350bps by 2027[5].

Market Implications and Future Outlook

Competitive Landscape Reshuffle

https://www.tsgconsumer.com/news/tsg-consumer-to-acquire-eos-fitness, https://archive.org/stream/FinancialTimes1989UKEnglish/Oct%2017%201989,%20Financial%20Times,%20%2330974,%20UK%20(en)_djvu.txt, https://archive.org/stream/FinancialTimes1984UKEnglish/Nov%2016%201984,%20Financial%20Times,%20%2329476,%20UK%20(en)_djvu.txt, https://www.investing.com/news/company-news/tsg-consumer-partners-acquires-budget-gym-chain-eos-fitness--wsj-93CH-4039373, https://www.ropesgray.com/en/news-and-events/news/2025/05/ropes-gray-represents-tsg-consumer-partners-in-acquisition-of-eos-fitness, https://www.leonardgreen.com/crunch-fitness-announces-strategic-investment-from-leonard-green-partners/, https://www.prnewswire.com/news-releases/crunch-fitness-announces-strategic-investment-from-leonard-green--partners-302428676.html, https://sgbonline.com/leonard-green-partners-takes-majority-stake-in-crunch-holdings/, https://www.atfw.ca/blog-3/crunch-leonardgreen, https://ir.lifetime.life/news-events/press-releases/detail/65/life-time-fitness-enters-into-definitive-agreement-to-be-acquired-by-affiliates-of-leonard-green-partners-and-tpg, https://www.crunch.com/franchise/news, https://princetonequity.com/barrys-announces-new-strategic-investment-partner-princeton-equity-group/, https://www.prnewswire.com/news-releases/barrys-announces-new-strategic-investment-partner-princeton-equity-group-302350785.html, https://pe-insights.com/barrys-bootcamp-expands-global-footprint-with-princeton-equity-group-investment/, https://www.dailymotion.com/video/x9cddgg, https://www.prnewswire.com/news-releases/l-catterton-to-acquire-majority-stake-in-solidcore-302259058.html, https://finimize.com/content/l-catterton-acquires-majority-stake-in-popular-pilates-chain-solidcore

Get M&A headlines on X!