Anchor Pilates
Reformer Pilates studio group · Sea Point, Claremont & Durbanville · Cape Town, South Africa
What's in this deal book
Eight sections, from the one-page investment case to the full staged data room. Select any line below, or use the sidebar.
The transaction in one view
The investment case
The condensed thesis: a recurring-membership studio group that runs without its founder, sold clean on a fixed timeline because the owner is emigrating. Speed and certainty are the buyer's edge.
Buy a membership annuity that runs without its owner
72% recurring
1,850 members on monthly dues, ~21-month average tenure. The cash flow is subscription, not project.
Runs without Nadia
A studio director and a 14-instructor bench deliver every class. The founder is brand and marketing, not the room.
Fixed timeline
The owner emigrates in ~10 months. A hard date forces a clean, full exit, not a distressed one.
Five clear levers
A 4th studio, corporate memberships, teacher-training, an app tier, and maturing Durbanville to group average.
Three studios, one membership base
Anchor runs three reformer Pilates studios across Cape Town (Sea Point, Claremont and Durbanville) on a membership and class-pack model. Most revenue is monthly dues from 1,850 active members, with class packs, teacher training and retail on top. Delivery runs through a studio director and a bench of 14 instructors.
The membership annuity, in numbers
Member lifetime value vs cost to acquire
R thousands per member · LTV:CAC ≈ 7.9×
LTV = blended monthly value (R900) × average lifetime (21 months). Lifetime = 1 ÷ 4.8% monthly churn ≈ 21 months.
Boutique fitness is where the spend is going
Big-box to boutique
Members are leaving commodity gyms for small-group, instructor-led formats they will pay a premium for. Reformer Pilates is the fastest-growing corner of that shift, and it prices on outcome and community, not on treadmill count.
Ages up, not out
Reformer Pilates suits an older, higher-income, injury-conscious member who stays for years, not a January cohort that lapses by March. That is what makes the tenure long and the dues dependable.
Owner-operator tail
Cape Town's studio market is a long tail of single-site, owner-taught studios with no succession plan. A three-studio group with a real bench and a brand is the natural consolidator, or the natural first bolt-on for one.
What is being sold, and why now
A complete, running studio group acquired cash-free / debt-free at R18.0M, about 3.0× owner's earnings. The founder is emigrating to Australia in roughly ten months and wants a clean, full exit, not a wind-down.
- 1,850 active members and the recurring dues behind themplus the class-pack, teacher-training and retail lines
- Studio director and a 14-instructor benchthe director and the core instructors intend to stay through the sale
- Brand, member list, three leases, booking system and socialsa recognised Cape Town reformer brand with an organic referral engine
A motivated seller on a hard clock
The emigration date is fixed, so the seller is motivated to close cleanly and quickly, and is offering a short handover with a defined remote-support period plus a brand-transition window. Speed and certainty, not distress.
Where a buyer's return comes from
Equity value bridge
R thousands · entry equity to exit equity · 5-yr hold
Base case holds the exit multiple flat at 3.0× SDE, with no re-rating assumed. Growth and deleverage alone return ~3.0× over five years. A re-rate to the 3.25× comp median is upside.
Anchor Pilates
A written walk through the investment case, one page for each part of the deck. The schedules and workings behind each page sit in the supporting documents and the data room that follow.
The deal in one paragraph
Buy a subscription business that people pay to belong to every month, that already runs without its founder, and that is being sold cleanly because the owner has a plane to catch.
Most of Anchor's revenue is monthly membership dues from 1,850 members who stay, on average, close to two years. That is the annuity. Class packs, teacher training and retail sit on top of it. The founder, Nadia Fourie, is the brand and the marketing, not the person teaching the classes, so the earnings do not walk out the door with her.
Why now is the whole point. Nadia's family emigrates to Australia in about ten months, which turns a good business into a motivated, time-boxed sale. The buyer gets a systemized, three-studio group with a real instructor bench, and a seller with every reason to hand it over clean and fast.
Three studios, one membership base
Anchor is three reformer Pilates studios in Cape Town (Sea Point, Claremont and Durbanville), run as a single membership brand.
Members pay monthly dues for class access, roughly R710 a month on average, and many top that up with class packs and retail, lifting the blended value to about R900 a member each month. Across the three studios that is R22.0M of trailing revenue, 72% of it recurring dues.
The group has traded since 2019, employs a studio director, 14 instructors and three front-desk staff, and earns a 57% contribution margin after the studio-level cost of delivery. The director, Thandi Mokoena, already runs the day to day, so the business does not depend on the founder being in the room.
A subscription, not a series of transactions
The revenue is recurring by design. Members are billed monthly against a card on file, and most stay for close to two years.
That is what separates Anchor from a pay-as-you-go studio. Roughly R15.8M of the R22.0M comes from membership dues that renew automatically, R4.4M from class packs, R1.1M from teacher training and workshops, and R0.7M from retail. The dues are the base; everything else is upsell on top of an already-paying member.
Because the model is subscription, the value of a member is a function of how much they pay and how long they stay, not how often they happen to walk in. That makes the earnings forecastable in a way a transactional studio's never are.
The unit economics stack up
A member is worth about R18.9K in revenue over their lifetime and costs about R2.4K to win. That is a 7.9× return on acquisition spend.
The maths is simple and holds together. Members churn at about 4.8% a month, which means the average member stays roughly 21 months. At a blended R900 a month, that is R18.9K of revenue per member. Acquisition costs about R2.4K, mostly because 68% of new members arrive by referral or organically, so the paid cost of a member is low.
The acquisition cost pays back in about three months, and net revenue retention runs a little above 100% once price rises and class-pack upsell are set against the members who leave. In plain terms, the base grows its own revenue before a single new member is added.
Two studios mature, one still climbing
Sea Point and Claremont are mature and full; Durbanville, opened in 2022, is still filling, and that gap is built-in upside.
Sea Point turns over about R8.2M and Claremont about R7.9M, each running near capacity on peak hours. Durbanville, the youngest studio, does about R5.9M and is still climbing its membership curve toward the group average. Bringing it up to the level of the other two is worth several million in revenue on its own.
This matters to a buyer because the growth is not a bet on a new market. It is the completion of a ramp that is already well under way, in a studio that already exists, with a playbook that has worked twice before.
It runs without the founder
Delivery already sits with a studio director and a 14-instructor bench. The founder's role is brand and marketing, which is the most transferable part of the business.
Thandi Mokoena, the studio director, runs scheduling, staffing and the member experience across all three sites. The 14 instructors have an average tenure of 2.6 years, and three front-desk staff handle the desk and admin. None of that depends on Nadia being present.
What Nadia holds is the brand voice, the content and the marketing engine, and that is exactly what a short handover and a defined remote-support period are designed to transfer. A three-year non-compete keeps her from rebuilding it next door.
Five levers, none of them heroic
The plan does not need reinvention. It needs a buyer to run the existing playbook harder.
First, open a fourth studio on the proven three-studio template. Second, sell corporate and wellness memberships, which Anchor has never chased. Third, scale teacher training, a high-margin line that is currently small. Fourth, add an app and on-demand tier to earn from members between visits. Fifth, mature Durbanville to the group average.
Each lever is independent, each has a worked comparison inside the group already, and none of them requires the founder. That is why the value-creation case is a plan a buyer can underwrite, not a hope.
What could go wrong, and the answer
The two real risks are churn and a key instructor leaving. Both are visible, and both are manageable.
Churn at 4.8% a month is normal for boutique fitness, but it is the number that most moves the value, so the data room shows it by cohort and by studio rather than as a single blended figure. A member concentration that is spread across 1,850 people, none of them material on their own, is the mitigant.
Instructor attrition matters because members follow teachers. The answer is a bench of 14 with reasonable tenure, retention terms for the core instructors written into the deal, and a director who owns the schedule. The founder risk, that the brand was really just Nadia, is handled by the handover, the remote-support period and the non-compete.
Supporting documents & data room
The detail behind the memo: the company and its history, the membership model and its cohorts, the three studios, the team, the value plan and the risks, plus the staged data room that holds every supporting file.
Five years, three studios, one brand
Nadia Fourie, a former dancer and reformer instructor, opened the first Anchor studio in Sea Point in 2019 on one idea: small-group reformer classes with named instructors and a membership people would keep. Claremont followed in 2021, Durbanville in 2022, and the group has run on the same membership playbook since.
Where the R22.0M comes from
Revenue mix
Majority recurring dues, TTM
Membership dues
Monthly dues billed to a card on file, ~R710/member/mo. Renews automatically. The base that makes the earnings predictable.
Class packs & drop-ins
Ten-packs and single classes, largely bought by members on top of their dues and by trialists who convert.
Teacher training & retail
Teacher training and workshops (5%) and apparel, grip socks and equipment (3%): small today, high-margin, and scalable.
Members stay close to two years
Membership retention curve
% of a joining cohort still active, by month
Cohort retention is measured on members joining 24+ months ago. Reactivations within six months are counted as retained, consistent with card-billing records.
Spread across three studios, no single point of failure
| Studio | Members | Revenue | % of group |
|---|---|---|---|
| Sea Point (2019) | 700 | R8.2M | 37% |
| Claremont (2021) | 660 | R7.9M | 36% |
| Durbanville (2022) | 490 | R5.9M | 27% |
| Group | 1,850 | R22.0M | 100% |
No single member is material; the largest corporate account is under 1% of revenue. Concentration risk sits at the studio level, and no studio is more than 37% of the group.
Members by studio
Durbanville still ramping to group average
Not owner-dependent for delivery
The founder's role is brand, content and marketing. Delivery runs through the studio director, a 14-instructor bench and a lead at each site, all of whom the sale is structured to retain.
Five levers, none of them heroic
- Open a fourth studio on the proven template.Two successful openings already de-risk the third. The playbook, brand and supplier terms transfer.
- Sell corporate & wellness memberships.Never chased. Cape Town corporates buy team wellness; Anchor has the brand to win it.
- Scale teacher training.A high-margin line at 5% of revenue today, with national demand for certified reformer instructors.
- Add an app / on-demand tier.Earn from members between studio visits and reach members who move or travel.
- Mature Durbanville to group average.The youngest studio is R2M+ of revenue below the other two, purely on ramp.
What could go wrong, and the answer
4.8%/mo today, shown by cohort. Spread across 1,850 members; price and pack upsell hold net revenue retention above 100%.
Members follow teachers. A 14-instructor bench, retention terms for core instructors in the deal, and a director who owns the schedule.
Nadia is marketing, not delivery. Handover, defined remote-support period and a 3-year non-compete transfer the brand.
Still on its ramp, not stalled. Bringing it to group average is the single largest, most controllable lever.
Fragmented, single-site rivals. Anchor's brand, bench and three-site density are the barrier a new studio cannot buy.
Three leases with staggered terms; all current, none up for renewal inside 18 months. Reviewed in the data room.
The evidence room, released by trust stage
The teaser is open to anyone. Financials, the anonymized cohort data and the corporate file unlock the moment a mutual NDA is signed. Member lists and the instructor roster, personal data under POPIA, stay behind the NDA, and the confirmatory items (bank statements, unredacted leases) open only in the exclusive room. The seller controls disclosure; the buyer sees exactly what is available and what comes next.
Mutual NDA
Two pages, standard mutual terms. Signing unlocks the financial statements, the membership and cohort data, and the member and instructor files in the index.
Every document, and where it sits
| Document | Fmt | Access |
|---|---|---|
| Corporate & legal | ||
| Certificate of incorporation & MOI | Available | |
| Directors' & shareholder resolutions | 🔒NDAAvailable | |
| Share register / cap table | 🔒NDAAvailable | |
| Business & trading licences | Available | |
| Brand, trademark & domain register | Available | |
| Financial | ||
| Annual financial statements FY23–FY25 | 🔒NDAAvailable | |
| YTD + TTM management accounts | XLSX | 🔒NDAAvailable |
| SDE / adj. EBITDA bridge + add-backs | XLSX | 🔒NDAAvailable |
| Company tax returns (ITR14), 3 yrs | 🔒NDAAvailable | |
| Deferred-revenue & WC schedule | XLSX | 🔒NDAAvailable |
| Bank statements, 12 months | On request | |
| Membership & revenue | ||
| Cohort retention & churn analysis (anonymized) | XLSX | 🔒NDAAvailable |
| MRR & membership-growth history | XLSX | 🔒NDAAvailable |
| Member list & billing records (personal data) | XLSX | On request |
| Pricing, plans & discount policy | 🔒NDAAvailable | |
| Booking-system data export | CSV | 🔒NDAAvailable |
| Studios & operations | ||
| Per-studio P&L & utilization (Sea Pt / Clrmt / Durb) | XLSX | 🔒NDAAvailable |
| Class timetable & capacity by site | Available | |
| Reformer & equipment schedule | XLSX | Available |
| Supplier & software contracts | 🔒NDAAvailable | |
| Document | Fmt | Access |
|---|---|---|
| People & HR | ||
| Instructor & staff roster (names, tenure) | 🔒NDAAvailable | |
| Org chart (roles, anonymized) | Available | |
| Employment & non-compete agreements | 🔒NDAAvailable | |
| Payroll & instructor comp schedule | XLSX | 🔒NDAAvailable |
| Key-instructor retention plan | On request | |
| Legal & compliance | ||
| Insurance policies (public liability, assets) | 🔒NDAAvailable | |
| POPIA compliance & member consent records | Available | |
| Litigation, injury & claims history | 🔒NDAAvailable | |
| Member terms & waiver templates | Available | |
| Leases & assets | ||
| Studio leases ×3 (redacted) | Available | |
| Full unredacted leases | On request | |
| Equipment & fit-out register | XLSX | Available |
| IP, brand assets & content library | Available | |
| Transaction | ||
| Confidential information memorandum | Available | |
| Draft sale agreement | 🔒NDAAvailable | |
| Working-capital / deferred-revenue peg method | XLSX | 🔒NDAAvailable |
| Vendor take-back & handover terms | 🔒NDAAvailable | |
| Cross-border / SARB settlement note | On request | |
Valuation
A cash-flow valuation built up from owner's discretionary earnings, cross-checked against boutique-fitness transaction multiples on one consistent basis, SDE.
Valued on cash flow, on one basis
We value Anchor on the cash it produces. Reported profit is first normalized to owner's discretionary earnings (SDE), then a discounted-cash-flow model on a conservative base case establishes intrinsic enterprise value. Boutique-fitness transaction multiples, quoted on the same SDE basis, provide the cross-check.
Base-case figures. The playable model on the next slide lets a buyer move the discount rate and terminal growth and watch the value move.
From reported profit to owner's discretionary earnings
Normalization bridge
R thousands · TTM
| Reported pre-tax profit | 4,050 |
| + Interest | 150 |
| + Depreciation & amortization | 400 |
| = Reported EBITDA | 4,600 |
| + Owner salary & benefits | 900 |
| + Owner discretionary (vehicle, travel, personal) | 350 |
| + One-time / non-recurring | 150 |
| = SDE (owner-operator basis) | 6,000 |
| − Market-rate marketing lead (replaces owner) | (900) |
| = Institutional adjusted EBITDA | 5,100 |
SDE frames the owner-operator 3.0× asking multiple and the DCF. Institutional adjusted EBITDA deducts a fully-loaded marketing lead to replace the founder's role, since a hands-off buyer cannot capture the owner's unpaid marketing labour.
Conservative base case, off SDE
| R 000s | Yr1 | Yr2 | Yr3 | Yr4 | Yr5 |
|---|---|---|---|---|---|
| SDE (3% organic) | 6,180 | 6,365 | 6,556 | 6,753 | 6,955 |
| − Cash tax @27% | (1,410) | (1,460) | (1,512) | (1,565) | (1,620) |
| − Maintenance capex (reformers) | (780) | (795) | (810) | (826) | (843) |
| − Δ working capital | (150) | (115) | (160) | (166) | (170) |
| Unlevered FCF | 3,840 | 3,955 | 4,074 | 4,196 | 4,322 |
Fair-value case grows SDE (R6.0M) at 3%/yr, matching terminal growth. This is deliberately below the value-creation plan (used for the returns snapshot), so the DCF does not lean on the upside.
Discount rate build-up
Small SA private-company cost of capital
Enterprise value ≈ R18.3M
| R 000s | FCF | × | PV |
|---|---|---|---|
| Year 1 | 3,840 | 0.806 | 3,097 |
| Year 2 | 3,955 | 0.650 | 2,572 |
| Year 3 | 4,074 | 0.524 | 2,137 |
| Year 4 | 4,196 | 0.423 | 1,775 |
| Year 5 | 4,322 | 0.341 | 1,474 |
| PV of explicit FCF | 11,055 | ||
| Terminal value (g=3.0%) | 21,198 | 0.341 | 7,231 |
| Enterprise value | 18,286 |
Sensitivity · EV (R000s)
Discount rate × terminal growth · active cell highlighted
| r ↓ / g → | 1% | 2% | 3% | 4% |
|---|---|---|---|---|
| 20% | 21,298 | 21,907 | 22,588 | 23,355 |
| 22% | 19,233 | 19,697 | 20,211 | 20,781 |
| 24% | 17,529 | 17,890 | 18,286 | 18,721 |
| 26% | 16,099 | 16,385 | 16,696 | 17,035 |
| 28% | 14,883 | 15,112 | 15,360 | 15,628 |
What boutique-fitness studio groups trade for
| Target (type) | Yr | Region | Revenue | EV/SDE |
|---|---|---|---|---|
| Independent reformer studio (single site) | 2024 | ZA | R9M | 2.6× |
| Two-site Pilates studio (owner-operated) | 2023 | ZA | R14M | 2.9× |
| Regional barre & Pilates group | 2024 | UK | R38M | 3.1× |
| Multi-studio reformer group (3–4 sites) | 2023 | AU | R52M | 3.4× |
| Boutique fitness group (Pilates + yoga) | 2024 | AU | R120M | 3.7× |
| Franchise-ready reformer concept | 2022 | US | R85M | 4.0× |
| Median | 3.25× |
Illustrative boutique-fitness / studio-group transactions, quoted on EV/SDE. Multi-unit and franchise-ready concepts trade at the top; single-site owner-taught studios at the bottom. Revenue converted to ZAR for comparability.
The asking price against every lens
Dashboards & forecasts
The membership business on one screen, three years of history, and the five-year plan behind the upside: members, MRR, cohorts and per-studio ramp.
The business on one screen
Three years of financial history
| R thousands | FY22 | FY23 | TTM |
|---|---|---|---|
| Revenue | 15,500 | 18,800 | 22,000 |
| Cost of delivery (studio-level) | 6,975 | 8,178 | 9,460 |
| Contribution | 8,525 | 10,622 | 12,540 |
| Contribution margin | 55.0% | 56.5% | 57.0% |
| Operating & overhead | 5,625 | 6,522 | 7,790 |
| Owner adjustments | 1,000 | 900 | 1,250 |
| Owner's earnings (SDE) | 3,900 | 5,000 | 6,000 |
| SDE margin | 25.2% | 26.6% | 27.3% |
2-year revenue CAGR (FY22→TTM) = (22.0 ÷ 15.5)1/2 − 1 ≈ 19%. Durbanville opened mid-2022, so FY22 carries only a partial year for the third studio.
Revenue and SDE plan
Revenue & SDE
R thousands · history + value-creation plan
| R 000s | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| Revenue | 24,200 | 26,600 | 29,300 | 32,200 | 35,400 |
| SDE | 6,600 | 7,300 | 8,100 | 9,000 | 9,900 |
| SDE margin | 27.3% | 27.4% | 27.6% | 28.0% | 28.0% |
| Free cash to equity | 2,300 | 2,900 | 3,600 | 4,300 | 5,000 |
Revenue ~10% CAGR on the value-creation plan (a 4th studio, corporate memberships, teacher-training). The DCF uses only the conservative 3% case, not this plan.
Membership growth drives the annuity
Active members
Count · FY22 to Year 5 (plan)
The maturity curve across three studios
Revenue by studio
R thousands · Durbanville still climbing to group average
| R 000s | TTM | Y1 | Y3 | Y5 |
|---|---|---|---|---|
| Sea Point | 8,200 | 8,700 | 9,700 | 10,500 |
| Claremont | 7,900 | 8,400 | 9,400 | 10,200 |
| Durbanville | 5,900 | 7,100 | 9,400 | 10,700 |
| Existing three | 22,000 | 24,200 | 28,500 | 31,400 |
Existing studios reach ~R31.4M by Year 5; the balance to the R35.4M plan (~R4.0M) comes from a fourth studio and the corporate / teacher-training lines.
Diligence · competitors
A fragmented boutique-fitness market where brand, an instructor bench and multi-studio density are the moat a new single-site studio cannot buy.
Who Anchor competes with
| Competitor archetype | Scale | Focus | Note |
|---|---|---|---|
| Single-site owner-taught studio | Small / local | Reformer, one location | Personal, but succession-fragile; capped by one owner's teaching hours |
| Big-box gym chain | Large / national | Equipment access | Cheap and broad; no small-group instruction, no community, high churn |
| Yoga / barre studio group | Mid regional | Adjacent boutique formats | Overlapping member, different discipline; some compete on the wellness wallet |
| At-home / app Pilates | Digital | On-demand video | Convenient and cheap; no reformer, no coaching, complements rather than replaces |
| Premium multi-format boutique | Large regional | Bundled boutique fitness | Closest on brand and price; not reformer-specialist, thinner in Anchor's suburbs |
| Hotel & corporate wellness | Varies | Amenity fitness | Serves a captive audience; a channel Anchor can partner with, not a direct rival |
Recurring-led and high-touch
Anchor sits in the upper-right: membership-led and high-touch, more recurring and reformer-specialized than the single-site studios, and far more personal and sticky than the big-box gyms and at-home apps.
Why a new studio cannot easily win the base
A known Cape Town name
Five years, three studios and an organic referral engine, and 68% of new members arrive by word of mouth. A new studio starts that trust from zero.
14 instructors, not one owner
Members follow good teachers, and Anchor has a bench of them. A single-owner studio is one instructor's burnout away from failing.
Membership & habit
Reformer members build a routine around a studio, a timetable and a favourite instructor. Once embedded, they rarely re-shop the category.
Diligence · working capital
A negative working-capital profile: members pay ahead, so the business funds itself. The deferred-revenue liability is the story, and how it is treated at close.
Members pay ahead, so the business funds itself
Net working capital build
R thousands · deferred revenue drives it negative
| Accounts receivable (card settlement) | 180 |
| Prepaid & other | 120 |
| Accounts payable & accruals | (350) |
| Deferred revenue (unearned dues & packs) | (1,800) |
| Net working capital | (1,850) |
| % of revenue | −8.4% |
How the deferred-revenue liability is settled
- Cash-free, debt-free basisthe seller keeps surplus cash; the buyer takes the business with a normalized working-capital position
- Deferred revenue delivered, not strippedthe R1.8M of unearned dues and packs is a service the buyer will deliver, so the matching cash transfers with it
- Set as the working-capital pegNWC is pegged at the normalized −R1.85M; anything above or below trues up dollar-for-dollar at close
- No cash surprises either waythe peg means neither side wins or loses on the timing of billing cycles
Self-funding growth
Because members pay before they attend, every new member adds cash before they cost anything to serve. Growth funds itself instead of consuming working capital.
Deliverable, not debt
The deferred balance is an operating liability the buyer assumes with the matching cash, not third-party debt. It is pegged and trued-up, not deducted from the price as a borrowing.
Clean receipts, light supplier base
Card-on-file, minimal AR
Dues are billed automatically to a card on file, so receivables are tiny, a few days of settlement in transit. Failed-payment recovery runs above 95% within the month.
No supplier dependency
The main costs are instructor pay, three leases and a booking platform. Reformers and apparel are sourced across substitutable suppliers on standard terms. No single vendor is material.
Negative cycle, a structural advantage
Members pay in advance and suppliers are paid on terms, so cash comes in before it goes out. The negative working-capital cycle is a feature of the membership model, and it is exactly why SDE converts to free cash flow at a high rate.
Diligence · financing
How a buyer funds the R18.0M: a modest senior facility, a vendor take-back, and buyer equity, conservatively levered against a subscription cash flow.
How the purchase is funded
Sources
| Senior term loan | R8,000K | 40% |
| Vendor take-back (seller note) | R1,800K | 9% |
| Buyer equity | R10,000K | 51% |
| Total | R19,800K | 100% |
Uses
| Purchase price (3.0× SDE) | R18,000K | 91% |
| Transaction fees | R1,100K | 6% |
| Working capital & min cash | R700K | 3% |
| Total | R19,800K | 100% |
Conservatively levered against a subscription
Funding mix
Sources of the R19.8M
| Instrument | Amount | Rate | ×EBITDA |
|---|---|---|---|
| Senior term loan | R8,000K | 11.0% | 1.6× |
| Vendor take-back (sub.) | R1,800K | 8.0% | 0.4× |
| Total debt | R9,800K | 1.9× | |
| Buyer equity | R10,000K | ||
| Total capital | R19,800K |
Entry leverage 1.9× institutional EBITDA (R5.1M) against a 3.0× SDE purchase multiple. Boutique-fitness cash flow supports modest debt; the vendor take-back keeps the seller aligned through the handover.
Coverage comfortably above covenant throughout
Cash flow vs debt service
R000s bars · DSCR ratio labelled
| R 000s | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| CFADS | 4,200 | 4,800 | 5,400 | 6,100 | 6,800 |
| Debt service | 2,309 | 2,309 | 2,864 | 2,864 | 2,864 |
| DSCR | 1.82× | 2.08× | 1.89× | 2.13× | 2.37× |
| Net debt/EBITDA | 1.5× | 0.9× | 0.4× | 0.0× | 0.0× |
Covenants (typical): min DSCR 1.25×, max leverage 2.5×. Lowest DSCR is 1.82× (Yr1), a ~46% cushion above the floor. Senior facility retires by Year 5; the vendor note is interest-only years 1–2, then amortizes.
Conservative, self-liquidating debt
1.9× at entry → 0 by Yr4
Well inside a 2.5× cap and cleared to debt-free within four years from the studios' own subscription cash flow.
DSCR 1.82–2.37×
Comfortable headroom above a 1.25× covenant across the whole plan, even before the value-creation upside.
Holds at −15% members
A 15% membership shock still covers scheduled debt service (DSCR > 1.25×), given 72% recurring dues and low variable cost.
Process & close
The deal structure and terms, including the cross-border settlement note, and how the process runs from here to a clean, time-boxed close.
How the transaction is put together
| Term | Position |
|---|---|
| Structure | Share sale preferred (clean transfer of leases, memberships & brand); asset sale considered |
| Headline price | R18.0M enterprise value, 3.0× SDE (~US$1.0M) |
| Basis | Cash-free, debt-free |
| Working capital | Normalized peg −R1.85M (deferred revenue), trued-up at close |
| Included | Brand, member list, three leases, reformers & equipment, booking system, socials, goodwill |
| Excluded | Surplus cash, owner's personal assets |
| Vendor take-back | R1.8M seller note, 3-yr, subordinated |
| Escrow / holdback | 10% for 12 months against reps & warranties |
| Handover | 60–90 days on-site, then a defined remote-support period after relocation |
| Non-compete | 3-year, Western Cape reformer Pilates |
Clean transfer of what matters
Memberships, three leases and the brand transfer with the company, avoiding novation of every member and landlord. An asset sale stays open if tax or lease-consent trade-offs favour it.
Settling proceeds offshore
The seller is emigrating and may wish to settle part of the proceeds in USD. South African exchange control applies: the transfer runs through SARB approval and the seller's foreign-capital allowance, handled via an authorised dealer bank.
How the process runs from here
- Data-room access & Q&ANDA signed, gated files open; questions submitted to Top Tier Advisory
- Management call & studio visitwith the owner and studio director, ahead of an indicative offer
- Indicative offer (IOI)headline price and structure for discussion, within weeks given the timeline
- Confirmatory diligencemember cohorts, per-studio P&L and leases, under continued confidentiality
- Sale agreement & closewith the handover, remote-support period, non-compete and SARB steps in train
Top Tier Advisory
Represented by Top Tier Advisory. Illustrative sell-side sample built on a fixed, seller-driven timeline.