London based luxury health and fitness brand set to expand with new £88.5m deal

OakNorth, the neobank for entrepreneurs, by entrepreneurs, has partnered with Searchlight Capital Partners, a private investment firm operating across Europe and North America, to finance Third Space, a London based luxury health and fitness brand.

Launched in 2001 and currently operating a portfolio of eight clubs in ‘iconic’ locations across London, Third Space has cemented itself as ‘one of the pillars of the city’s vibrant health and fitness scene’.

KSL Capital Partners, an investment firm focused on travel & leisure, acquired a majority stake in July 2021 from Encore Capital, who remains involved as a minority shareholder in the business. With the additional capital from OakNorth and Searchlight Capital Partners, Third Space plans to significantly increase its footprint and grow its team.

Colin Waggett, CEO of Third Space, said: “We are seeing exceptionally strong demand for Third Space memberships, with most of our clubs operating with waiting lists. Our business sits at the heart of Londoners’ desire for health and fitness, authentic experiences and luxury service, and Third Space is uniquely positioned to meet these demands.

“We are pleased to have support from both OakNorth and Searchlight, and we look forward to opening more clubs in residential locations to complement our excellent central London sites and enhance member value, as we know that members like to use a club close to home and work.”

Deepesh Thakrar, senior director of Debt Finance at OakNorth, continued: “This is a very exciting transaction for OakNorth. Third Space is a market-leading fitness company that has a loyal clientele and a phenomenal brand.

“It is backed by an incredibly strong and well-recognised sponsor in KSL Capital, which has tremendous expertise in the leisure sector. It was a pleasure partnering with Searchlight to come up with an innovative structured finance facility - we hope to work with them on more joint loans in the future.

“Josh Mailling, senior associate and Ben Wulwik, head of execution at OakNorth were instrumental in getting this deal closed and worked tirelessly with me to deliver for Third Space.”

Oliver Haarmann, founding partner at Searchlight, concluded: “Over the past 20 years, Third Space has established itself as a true leader in London’s burgeoning health market. We see significant opportunity for its continued growth, so are excited to be able to support the business as it enters the next stage of its journey.”

By Matthew Neville – Senior Correspondent, Bdaily

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