ABC Financial Services, which provides billing and payments software for health clubs, is up for sale, three sources said.
Stephens Inc is advising on the process. Indications of interest were sent out at the end of August, one of the sources said.
ABC generates about $50 million in EBITDA, the person said. Prospective bidders are offering 14x to 15x, a second source, part of the three, said.
James Bottin, ABC’s founder and chairman, opened his own martial arts studio in 1974. He created ABC in 1981 to deal with the billing and software needs of his own club, the company’s website said.
ABC, Sherwood, Arkansas, expanded its customer base and covers more than 8,000 clubs in the U.S. Clients include Gold’s Gym, Chuze Fitness and Claremont Club.
Private equity firms have been frequent investors in payments companies.
Lightyear Capital in August bought eCommission from Milestone Partners. Francisco Partners this month acquired Network Merchants Inc, or NMI, from Bregal Sagemount. Francisco’s deal came after selling PayLease to Vista Equity Partners in June and, in April, offloading Paymetric to Vantiv. GTCR, a veteran fintech investor, also agreed to buy Sage Payment Solutions in June.
Health clubs have also attracted PE. North Castle Partners and JW Childs sold Equinox Fitness in 2006 while Brockway Moran & Partners was an early investor of Gold’s Gym, the Wall Street Journal has reported. Leonard Green & Partners, along with TGP Capital, acquired Life Time Fitness in 2015. L Catterton, TPG Growth, WJ Partners, and Great Hill Partners have each invested in yoga studios.
Mergermarket previously reported that ABC Financial was seeking a buyer.
Executives for ABC Financial and Stephens could not be reached for comment.
Action Item: Call Paul Schaller, ABC’s CEO, at +1 800-622-6290
A fitness group works out at the gym. Photo courtesy of Cecilie_Arcurs/E+/Getty Images