The parent company of Life Fitness, which has been in a tussle with Technogym for supremacy in the growing fitness equipment market, is consolidating its leadership with its takeover of Cybex International. In any event, the acquisition will help Brunswick Corp. to implement a previously stated plan to double its revenues from the segment from the current annual level of about $800 million.
Brunswick has agreed to pay $195 million for Cybex, which had an adjusted operating profit before amortization (Ebitda) of $18 million on sales of around $195 million in 2015. The American group projects incremental earnings per share of 20 cents through the takeover, excluding restructuring and acquisition costs, thanks to annual savings of $23 million through synergies, rising to $30 million by 2020. That would include savings on manufacturing costs of $7 million initially, rising to $10 million in the longer term.
With Cybex in its portfolio, Brunswick will have a more diversified and compelling offer in the commercial fitness market, which represents 74 percent of Cybex' sales against 53 percent for Life Fitness. It will notably get the rights to Cybex' Arc Trainer. After the acquisition, the commercial sector will represent 57 percent of the group's fitness equipment sales.
Life Fitness could also help Cybex to become more international. Sales outside North America make up 45 percent of Life Fitness' sales and 30 percent of Cybex' sales. The international business will represent 42 percent of their combined revenues.
The announcement of the deal comes only a few days after that of Nautilus' acquisition of Octane Fitness. It may be just the beginning of a consolidation process in the fitness equipment industry. The other recent move in the sector was Precor's takeover of Queenax, a developer of modular training systems.
