Fitness M&A in 2026: What Houlihan Lokey Is Tracking
If you run a gym, a Pilates studio, or any hybrid wellness facility, the investment banking world is watching your sector more closely than at any point in recent memory. Houlihan Lokey's March 2026 Fitness Market Update declared 2025 a banner year for fitness M&A activity and projected that deal volume will remain elevated throughout 2026. The categories drawing the most attention from institutional buyers and private equity firms are strength training, Pilates, and wellness modalities. That's not a coincidence. That's capital following consumer behavior.
For operators thinking about growth, partnership, or an eventual exit, this report functions as a strategic map. Here's what the data is telling you and what you should be doing about it right now.
2025 Was a Banner Year. 2026 Is Expected to Match It.
Houlihan Lokey's update framed 2025 as a turning point for fitness sector consolidation. After years of post-pandemic volatility, deal activity found its footing. Strategic acquirers, PE-backed platforms, and franchisee consolidators all moved aggressively. The pipeline heading into 2026 reflects the same momentum, with capital still actively seeking exposure to recurring-revenue fitness businesses with defensible membership bases.
The broader macro context supports this. Consumer spending on fitness and wellness has proven remarkably resilient even under inflationary pressure. Membership retention at premium facilities has strengthened. And David Lloyd's $2.3B PE continuation fund move earlier this year signaled that institutional money views premium gym operators as long-duration assets worth holding, not just flipping.
The Houlihan Lokey update also pointed to the growing influence of technology-enabled fitness platforms on valuation. The $7.5B Playlist-EGYM merger reshaped how acquirers think about gym infrastructure. Operators who've integrated smart equipment, digital engagement tools, and data-driven member tracking are commanding valuation premiums that purely analog competitors simply can't match.
The 24 Hour Fitness Deal: What It Actually Signals
Among the landmark 2025 transactions, the acquisition of 24 Hour Fitness stands out for what it says about how acquirers assess value in large-format operators. 24 Hour Fitness entered bankruptcy in 2020 and spent years restructuring. The fact that it became an acquisition target in 2025 tells you something important: real estate footprint and an established membership base carry strategic value even when the operating business is distressed.
For the acquirer, the calculus wasn't about inheriting a broken model. It was about securing lease positions in high-traffic markets and gaining immediate access to a large, geographically distributed member population. Rebuilding that from scratch would cost more and take longer than buying it at a distressed valuation.
This matters for independent operators who assume that only pristine, growing businesses attract buyers. That's not always true. If your facility sits on strong real estate, holds long-term leases in undersupplied markets, or carries a loyal membership base that generates predictable monthly revenue, you're holding assets that institutional buyers know how to value.
The Crunch Consolidation: Franchisee Roll-Up in Real Time
The other deal worth studying closely is Fitness Ventures' acquisition of 22 Crunch Fitness clubs, reported in late May 2026. This is the franchisee consolidation play that Houlihan Lokey flagged as a structural trend in fitness M&A, and it's now playing out in full view.
The logic is straightforward. Larger franchisee operators can achieve cost efficiencies in purchasing, staffing, marketing, and technology that smaller, independent franchisees can't. When underperforming units come to market, whether through operator fatigue, financial stress, or an owner approaching retirement, a well-capitalized platform can absorb them, standardize operations, and extract margin that wasn't there before.
For independent franchisees and unaffiliated gym operators, this trend cuts both ways. It creates a ready buyer for your business if you're looking to exit. But it also means you're increasingly competing against operators with institutional scale, shared services, and PE-level marketing budgets. The window to either grow into a platform or exit at a strong multiple may be narrower than it looks.
Why Strength Training, Pilates, and Wellness Are the Three Deal Drivers
Houlihan Lokey's identification of these three categories as primary M&A targets in 2026 isn't arbitrary. Each maps directly onto a durable consumer trend that acquirers believe has multi-year runway.
Strength training has become the dominant fitness modality in North America. Getting stronger is now America's number one fitness goal in 2026, displacing weight loss from the top position it held for decades. Facilities built around progressive resistance training, whether that's traditional weight rooms, functional training studios, or coached strength programs, are attracting buyers who want exposure to a category with high member retention and strong community dynamics.
Pilates has followed a similar trajectory. The reformer Pilates segment in particular has seen explosive studio growth over the past three years, and acquisition activity has followed. The model is attractive to buyers: relatively low equipment capital once the studio is built out, high class-based revenue per square foot, and a member demographic that skews affluent and retention-positive.
Wellness modalities cover a broader range, from recovery services like cryotherapy, infrared sauna, and red light therapy, to nutrition coaching, mental health integration, and diagnostic health testing. The convergence of fitness and healthcare is accelerating. The fact that Function raised $298M at a $2.5B valuation on the strength of a health diagnostics model tells you where the broader wellness category is heading and why acquirers want gym operators who are already moving in that direction.
These three categories also share a common financial characteristic: they generate recurring revenue. Membership models, class packages, and monthly wellness subscriptions all produce the kind of predictable cash flow that institutional buyers build discounted cash flow models around. That's not incidental to the M&A interest. It's the foundation of it.
What Acquirers Are Actually Looking At When They Value Your Business
If you're an operator with any intention of selling in the next 24 to 36 months, you need to understand how institutional buyers and PE firms construct their valuations. They're not just looking at your top-line revenue. They're looking at the quality and predictability of that revenue.
The metrics that matter most in fitness M&A due diligence right now include:
- Recurring revenue percentage. What share of your total revenue comes from monthly membership fees, annual contracts, or subscription-based services? The higher this number, the lower the perceived risk for an acquirer and the higher the multiple they'll pay.
- Member lifetime value (LTV). How long do members stay, and how much do they spend over that relationship? A facility with a 36-month average member tenure is worth materially more than one with 12 months, even if monthly revenue looks similar on the surface.
- Churn rate and retention curve. Acquirers will model your attrition. High early churn is a red flag. A flat or declining churn curve signals a sticky product and effective onboarding.
- Revenue mix diversification. Facilities that generate revenue from memberships, personal training, group classes, retail, and wellness add-ons are more resilient and more attractive than single-revenue-stream operators.
- Clean financial records and documented systems. PE buyers and strategic acquirers run rigorous due diligence. If your financials aren't audit-ready, your valuation will reflect the risk premium they assign to that uncertainty.
This is also where understanding how member behavior is reshaping the fitness floor becomes a business imperative rather than a trend piece. Operators who've adapted their programming and physical space to reflect how members actually train today, blending strength, mobility, recovery, and coaching, tend to produce the retention metrics that justify premium valuations.
The Strategic Moves to Make Now
If your exit horizon is 2027 or 2028, you're already inside the preparation window. The work you do on your business model and financial structure in the next 12 months will determine the multiple you command when you go to market.
Start by auditing your revenue mix. If more than 60% of your revenue is membership-based and recurring, you're in a strong position. If you're heavily dependent on personal training sessions or drop-in traffic, you've got work to do. Build or strengthen your group class program, add a wellness service tier, and create membership structures that incentivize longer-term commitments.
Invest in your data infrastructure. Acquirers want to see member dashboards, retention tracking, and LTV calculations. If you can't produce these in a board-ready format, hire someone who can help you build that reporting capability now. The gym operators winning the best M&A terms in 2026 are the ones who can present their business with the same analytical rigor that institutional buyers use internally.
Watch the broader capital flows for directional signals. GymNation's $100M BlackRock-backed expansion into Asia and deals like it tell you that institutional capital has a strong appetite for scalable fitness platforms. Your job is to make your business look as much like a platform as possible, even if you're operating at a single-facility or small multi-unit level.
The Houlihan Lokey report is a signal, not just a market summary. Capital is moving toward strength training, Pilates, and wellness. Consolidators are active. PE firms are underwriting fitness at premium multiples for the right businesses. If you're building toward an exit or a growth partnership, you're not waiting for the market to come to you. You're building the business the market is already looking for.