Viva Leisure's strategic investment in Boutique Fitness Studios

Viva Leisure Limited (ASX:VVA) has entered into a binding agreement for a strategic investment of $2.0 million for 34% of Boutique Fitness Studios (BFS), the Australian and New Zealand Master Franchisee of four brands from Xponential Fitness (NYSE:XPOF). The investment aims to diversify Viva's business and expand its network, with potential for further acquisition and integration of BFS brands into Viva's product offerings.

Executive Commentary on BFS Investment

The investment into BFS expands Viva's network to over 400 locations across multiple disciplines and brands, enhancing our diverse offering while simultaneously introducing a new market for Viva Pay and other Viva technologies. We look forward to working with BFS founder and CEO Matt Gordin and his team, and the wider Xponential Fitness team to grow the brands in Australia and New Zealand. - Harry Konstantinou, CEO and Managing Director of Viva Leisure Limited

Summary of Viva Leisure's BFS Investment

Viva Leisure's acquisition of a strategic interest in Boutique Fitness Studios (BFS) marks a significant move to diversify its business and expand its network. The investment, with an option to acquire up to 100% of BFS, aligns with Viva's focus on replicating successful growth strategies across all segments of the fitness market. The strategic investment presents significant synergy opportunities and the potential to integrate BFS brands into Viva's product offerings, including the upcoming Viva Pass product. The partnership is expected to drive further growth for Club Pilates, StretchLab, Rumble Boxing, and CycleBar in Australia and New Zealand. With the founders staying on and plans for a launch in New Zealand, the investment is poised to create cross-sell opportunities and further revenue growth for Viva Leisure. The transaction, fully funded with existing cash reserves and available bank facilities, is not expected to contribute to Viva's FY25 financial performance but is anticipated to positively impact future years. The integration of BFS into Viva's operational network presents opportunities for revenue upside, operational efficiency, and further growth across the expanded studio network.