Brunswick Sells Life Fitness To KPS Capital Scrapping Planned Spinoff

Brunswick (BC) announced earlier this week that private equity firm KPS Capital Partners will acquire its fitness business for $490m in cash, ending the unit’s planned spinoff. Brunswick paid over $300m for the business back in 1997, but sales have been declining over the past few years. Brunswick CEO David Foulkes noted that ‘with the sale of the Fitness business, we sharpen our focus on Brunswick’s unique and formidable marine platform.’ The boating and marine segment is pretty much all that is left at Brunswick after it sold off its bowling operations a few years ago.

Life Fitness’ new owners are excited about the deal. KPS partner Jay Bernstein is ‘very excited to invest in Life Fitness, the leading global brand in fitness equipment’ and is ‘exceedingly confident that Life Fitness will thrive as an independent company.’ The health market is interesting and flooded with high end bikes, like Pelotons, that have excited consumers and energized the space. It will be interesting to see if a more value oriented approach can work or if the company adopts a new strategy.

The deal is expected to close sometime this quarter (private equity moves quickly), but there is no reason to expect any issues with execution. I am sure that KPS’ analysts and associates are eagerly awaiting the arrival of Brunswick Billiards tables and Life Fitness exercise equipment into their office.

As a result of this announcement, we will remove this spinoff from the ‘Upcoming Spinoffs’ table and add yet another chapter to the growing book of potential spinoffs actually sold off to private equity instead.

Disclosure: Author holds no position in any stock mentioned.