Project Steps was a provider of digital vouchers for physical activities for both consumer and business customers at a network of independent gyms and health clubs in the UK, with focus in the Southwest. After several years of rapid growth, it generated revenue of c£5m in 2019 although at a trading loss. The temporary closure of all health and fitness venues during the COVID-19 pandemic resulted in a significant majority of customers cancelling their memberships, from which the business did not recover.
BDO advised and assisted Project Steps in running an AMA process. The successful bidder was a company whose director was also Project Steps’ sole director, which acquired the business and assets via a prepack administration.
Project Steps was ultimately placed into Administration in October 2022, with the Administrators, Simon Girling and Christopher Marsden, Business Restructuring Partners in the Bristol office of BDO LLP, competing the sale shortly after their appointment.
This deal was notable for the first use within the firm of an Evaluator’s report: under the Administration (Restrictions on Disposal Etc. to Connected Persons) Regulations 2021, any transaction to a connected party within eight weeks of the Administration (in the absence of creditors’ approval) requires an accompanying report by an independent Evaluator.
In this case, the buyer instructed Kevin Murphy of Compass Evaluator Reports, and he concluded that the grounds for, and consideration payable under, the deal were reasonable in the circumstances, having considered evidence supplied by the Buyer as regards its future viability.