UK leisure group Whitbread is selling its David Lloyd gym chain for £925 million.
The owner of Costa Coffee, Premier Travel Inn and Beefeater chains has sold the gym business to private equity firm subsidiary of London & Regional Holdings and Bank of Scotland, Versailles Bidco.
The group said it planned to use the cash to reduce its debts and follows a long period of portfolio restructuring that included the demerger of the Marriot global hotel chain last year and the disposal of TGI Friday and its 50% stake in Pizza Hut.
David Lloyd Leisure was first founded in 1982 by tennis player David Lloyd, who sold it to Whitbread in 1995 for £182m. It now has 69 sites, including 60 in the UK and Ireland.
"Following the success of the management action taken in David Lloyd over the last 18 months, and a review of the health club market, we have decided that this sale represents excellent value for our shareholders," said Whitbread chief executive Alan Parker.
"Whitbread is now well placed to deliver the ambitious growth plan for its hotels, restaurants and coffee shops."
At the time, the company reported work to stabilise a group-wide migration to standardised Oracle packages was going well and would bring commonality across the business and IT systems, while still allowing each business some autonomy.