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Wednesday
Jun012016

Life Fitness President Chris Clawson Talks Acquisitions, Competition

In the last few years, Life Fitness President Chris Clawson has had a lot on his plate; he helped oversee the acquisition of two well-known commercial fitness brands, SCIFIT (June 2015) and Cybex International, Inc. (January 2016). 

In the June issue of Club Business International, Clawson discusses how Life Fitness’ recent acquisitions will help take the company to $1.5 billion in revenues by 2020. 

CBI: The last time we touched base with you and Life Fitness, it was to discuss its acquisition of SCIFIT Systems, Inc. No one mentioned then that something was in the works with Cybex International, Inc. So, what happened?

Chris Clawson: I’ll give you a little insider information here. The conversation actually started close to four years ago, when John Aglialoro, the chairman of Cybex, began asking me—and our corporate parent, the Brunswick Corporation—if they could buy Life Fitness, to which Brunswick kept saying, “No, Life Fitness isn’t for sale.”

It culminated last year at IHRSA 2015 when Arthur Hicks, Jr., their president and CEO, came over to our Trade Show booth and said, “We should merge together, and become a single, billion-dollar company. What do you think about that? Do you think Brunswick has changed its position?” I said, “I don’t think they have, but it’s worth having a conversation.”

John followed up around June. He’d spoken with Dusty McCoy, our outgoing CEO, and wanted to know if he should wait until Dusty retired to continue the conversation since Mark Schwabero, our new CEO and chairman, would be taking over soon. To help move things along, I introduced John to Mark. When they met, Mark told John he liked the idea, but that Life Fitness wasn’t selling. Then he asked about buying Cybex. By the next January, we’d consummated the deal.

CBI: How did you reach a price tag of $195 million for Cybex, a privately held company owned by UM Holdings, which is owned, in turn, by John Aglialoro, an industry icon, and his wife, Joan Carter?

CC: It was really a function of the due diligence and valuation processes. I won’t get into the nuances, but we looked at Cybex’s ability to create, distribute, and service—all of the things that make a company strong. It’s about valuing the value they create in the marketplace. It’s a great company, a spectacular brand, and we’re super-excited about it.

CBI: Do you think that the SCIFIT and Cybex acquisitions will lead to increased or, possibly, tempered competition in the commercial fitness equipment arena?

CC: I’m going to leave the competition out of the landscape and include only the customer, because I can’t speak to how our competitors are going to react. But I will say this. Our conversation with the customers has changed in its dynamic a few times over the course of the past two years.

When we did presentations and talked about Life Fitness and Hammer Strength, the conversation was almost exclusively about being fit and exercising. We were Life Fitness, and Hammer Strength, and we were talking to everyone who was exercising. It wasn’t just advanced exercisers. It was everyone who was exercising. But when we could include SCIFIT in the conversation, we could talk to people who were exercising, rehabilitating, or just getting involved in fitness.

Cybex changes the conversation again, giving us another inclusive fitness product, originally built to work for differently-abled people. When you include the Brunswick active recreation products we have—shuffleboard, put- ting greens, table tennis, billiards, air hockey, or foosball—we’re expanding the conversation again by changing what our customers can add to their facilities—e.g., fun. Why can’t you have an area that’s fun? Why does everything have to be work? Why does it have to be a workout? Can’t it be an area where you enjoy what you’re doing, but are also having a workout at the same time?

All of those are ways for us to change the landscape, not just the landscape of exercise and fitness, but of society; to get more people up and moving in a wide variety of ways.

Read Chris Clawson's full interview in the June issue of CBI.

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