Cardinal Stone Capital Advisers (CCA), a Nigerian private equity firm, has sold its stake in i-Fitness, Nigeria’s most prominent fitness and gym chain, to Verod Capital Management, a private equity firm. It represents a complete exit for Cardinal Stone, allowing the PE firm to sell its 65% stake in i-Fitness. While one source told TechCabal that the exit size was $12 million in a deal that valued the gym and fitness chain at $18.5 million, more authoritative sources have disputed that figure.
Two more sources shared that the deal size was less than $6 million.
A spokesperson for CCA disputed the value of the transaction calling it “incorrect” but declined to provide further details for confidentiality reasons.
The deal comes when questions about exit events in African startups continue to be asked. Exits in Africa’s private capital market fell by 73% in 2023 against a backdrop of inflation and currency devaluation across the continent.
“This has been an extremely exciting and rewarding journey for us,” said Yomi Jemibewon, Managing Director of Cardinal Stone.
“From believing in and supporting Foluso’s [iFitness’ founder] vision when others wouldn’t; to weathering the storm of a 6-month Covid-19 shut-down only three months after investing; and then exceeding our growth and impact objectives 12 months ahead of schedule.”
Cardinal Stone, the first institutional investor in i-Fitness, typically invests between $5 million and $10 million in portfolio companies across various sectors in Ghana and Nigeria. The firm invested in iFitness in 2019, and by 2021, the fitness company said it had spent ₦2 billion ($5.2 million) on its operations when it opened its 10th branch in Lagos.
In 2021, the gym had 8,000 members and projected it would reach 100,000 subscribers by the end of 2024. i-Fitness currently has over 26,000 active subscribers, meaning it must grow more than 4x this year to meet its projection. The gym has 21 branches in four Nigerian cities, with 18 branches in Lagos.
Members can train in any of these branches with an app that serves as a pass into the gym. The gym offers its members high-end equipment, personal trainers and yoga instructors, making it a standout in Nigeria’s relatively small fitness industry.
Launched in 2015, i-Fitness operates with different subscription fees across its branches. In Lagos, Port Harcourt and Abuja, Nigeria’s commercial hubs, subscribers pay a monthly subscription fee of ₦24,890 ($15.5) while new subscribers pay a one-time fee of ₦18,896 ($11.76). In Ibadan, Nigeria’s second-largest city, the subscription fee drops to ₦19,890 ($12.38).
Rand Merchant Bank Nigeria Limited (RMB) and CardinalStone Partners Limited (CSP) acted as joint financial advisors on the sale, while Udo Udoma & Belo-Osagie (UUBO) acted as legal counsel to Cardinal Stone on the transaction.
Editors note: We updated this article to reflect Cardinal Stone Capital Advisers’ statement, which disputed the value of the transaction after this article was published and additional comments from authoritative sources.
