With year-round sunshine and some of the world’s skimpiest bikinis, it’s no wonder Brazil is full of fitness clubs (as well as plastic surgeons and laser hair removal clinics).

But while Brazil has the second highest number of gyms after the US, it is only 10th in terms of revenue. And in the eyes of private equity investors, that means one thing: the potential for consolidation and profit.

It comes as no surprise then that BTG Pactual’s latest investment is in Bodytech, Latin America’s largest fitness chain by revenue with 33 gyms across Brazil.

In its first move since listing its shares last week, the Brazilian investment bank said on Monday that it had paid an undisclosed sum for a minority share in the company.

(According to Brazil’s Folha de S. Paulo newspaper, it was R$200m for 30 per cent).

The deal will allow BTG Pactual to join Bodytech’s controlling bloc, made up of entrepreneurs such as João Paulo Diniz (the 48-year-son of Abilio Diniz, the retail tycoon and fitness fanatic who failed to merge his supermarket chain with Carrefour’s Brazilian unit last year).

Bodytech is expected to increase its sales by 68 per cent to R$280m ($149m) this year via expansion and acquisitions, and the capital injection should also help prepare the company for an IPO in the next few years.

For BTG Pactual though, the deal is only the latest in a series of private equity investments in the consumer sector, which has been boosted by Brazil’s rising middle classes.

In the past three years, the bank has already got fat by buying into the car industry, a hospital chain and the commercial real estate developer BR Properties. And with 60 per cent of the Brazilian population expected to be in the middle class by 2018, the Bodytech deal is unlikely to be its last.

Related reading:
Carlyle: betting on toy shops in Brazil, beyondbrics
PE’s love affair with Brazilian classrooms, beyondbrics
Buy-out groups rush back to Brazil, FT
BTG Pactual raises record Brazil fund, FT
Blackstone’s deal on Pátria signals rising Brazil interest, FT
Private equity targeting emerging markets, FT

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