Virgin Active gets watchdog’s thumbs up for Real Foods deal

Fitness group Virgin Active’s transformation to a “wellness group” scaled a major hurdle on Friday after South Africa’s competition authorities approved its acquisition of the nutrition assets of Real Foods – the company behind Kauai and Nu Health Food Café – for almost R600-million.

The transaction, which was first announced in March, saw Real Foods founder Dean Kowarski appointed group CEO of Virgin Active, replacing Matthew Bucknall, a mainstay of the company.

The Competition Tribunal said it had approved the deal without conditions.

“The tribunal has concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market in South Africa. Furthermore, the proposed transaction raises no public interest concerns,” the watchdog said.

Virgin Active has had a business relationship with Kauai that dates back to 2005, and 108 of Kauai’s stores operate out of Virgin Active gyms.

Kowarski founded Real Foods Group in 2013 and acquired the Kauai business in 2015. Today, Kauai is South Africa’s biggest healthy eating fast-food group, with more than 150 stores across South Africa, Namibia, Botswana, Scotland, the Netherlands and Thailand.

Kowarski said the deal was an exciting moment for Virgin Active and the Real Foods Group.

“Both brands have been pioneers in their respective wellness fields, building local and international reputations for excellence. On the back of today’s transaction, we now have the opportunity to combine our skills to deliver a complete health offering around both fitness and nutrition so that our members can meet their health goals more successfully,” he said.

Virgin Active is a global gym and leisure business with operations in England, Italy, Spain, Australia, Singapore, Thailand and South Africa.

The group was affected by the Covid-19 pandemic and amassed an unsustainable amount of leasehold liabilities or rental arrears given the lockdowns. It undertook a restructuring process last year.

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