Nigeria-based private equity firm, Cardinal Stone Capital, has sold its majority stake in i-Fitness, the country’s leading fitness and gym chain, to another private equity firm, Verod Capital Management. The deal saw Cardinal Stone exit fully from i-Fitness by selling its 65% stake for $12 million.
The transaction valued i-Fitness at $18.5 million, according to two informed sources who spoke to TechCabal.
The move comes amid the ongoing talk about exit strategies in African start-ups. In 2023, the number of exits in Africa’s private capital market plummeted by 73%, because of wider economic issues such as inflation and currency devaluation across the continent.
Yomi Jemibewon, the Managing Director of Cardinal Stone, spoke positively of the company’s association with i-Fitness, despite difficulties including a six-month shutdown due to Covid-19.
Cardinal Stone, which became the first institutional investor in i-Fitness in 2019, generally invests between $5 million and $10 million in businesses across diverse sectors in Ghana and Nigeria. By 2021, i-Fitness claimed to have spent $5.2 million on operations upon opening its 10th branch in Lagos.
As of 2021, the gym chain had 8,000 members and projected to have 100,000 by the end of 2024. i-Fitness currently boasts of 26,000 active members and must quadruple this figure within the year to attain its target. The chain has 21 branches in four major Nigerian cities, including 18 in Lagos.
The gym company differentiates itself from competitors by providing modern equipment, personal trainers and yoga instructors, accessible to members via a mobile app. It adjusts its subscription fees by location. In the major cities of Lagos, Port Harcourt, and Abuja, users are charged a monthly subscription of about $15.5, but this drops to $12.38 in Ibadan, Nigeria’s second largest city.
The transaction was overseen by joint financial advisors Rand Merchant Bank Nigeria Limited (RMB) and CardinalStone Partners Limited (CSP). Legal advice was provided by Udo Udoma & Belo-Osagie (UUBO) to Cardinal Stone.
