Equity Analysis /
Mexico

Grupo Sports World: Flash SPORTS: Signs possible merger with Smart Fit Mexico

  • SW signed a MOU with Smart Fit, for a possible merger with its subsidiary in our country, Smart Fit Mexico

  • This would result in the merger of two of the most important wellness chains in Mexico (+230 units in the country)

  • Sports World would be positioned as the leader in both the high-end and low-cost segments in Mexico

Valentin III Mendoza Balderas
Valentin III Mendoza Balderas

Senior Equity Research Analyst, Consumer & Telecoms

Contributors
Marissa Garza Ostos
Juan Barbier
Banorte
15 April 2021
Published by

Sports World announced today the signing of a memorandum of understanding (MOU) with Smart Fit, a Brazilian gym operator (positioned as the largest in Latin America) for a possible merger with its subsidiary in our country, Smart Fit Mexico, leader in the low-cost segment nationwide. This transaction, subject to the signing of a binding agreement and other corporate and governmental approvals, would result in the merger of two of the most important wellness chains in Mexico, which translates into more than 230 units throughout the country.  

Positive implication: If this merger goes through, and pending further information in this regard (probably in conjunction with the 1Q21 report), Sports World would be positioned as the leader in both the high-end and low-cost segments in Mexico, a market that the issuer had previously sought to access through Zuma Fit, but its plans were halted by the pandemic. Although the transaction would take place in a context of uncertainty for SW and the sector in which it operates, being one of the most affected by the sanitary crisis, we believe that the news could be positive for the company, especially in terms of boosting profitability through seeking operating synergies.