Virgin Active Holdings Raised £88.4-million From backers including billionaire Christo Wiese, and will expand with the acquisition of the nutrition assets of South Africa’s Real Foods Group.

The UK health chain, part-owned by Richard Branson’s Virgin Group and private-equity firm Brait, plans to create a combined fitness and nutrition company, according to a statement on Friday. Dean Kowarski, 52, who founded Real Foods in Cape Town in 2013, will become CEO of the enlarged company.

Wiese, 80, who made his fortune mainly from retail, is newly cash rich after a multibillion rand compensation payout from Steinhoff International Holdings NV, which almost collapsed amid an accounting scandal in late 2017. He will contribute 50 million pounds toward the Virgin fundraising.

“We now have the opportunity to combine our skills to deliver a complete health offer around fitness and nutrition,” Kowarski said. “The additional investment in the business positions Virgin Active strongly to deliver growth over the long term.”

While the Covid-19 pandemic caused health clubs to struggle amid lockdown rules and social distancing, the industry is recovering -- helped by many people’s focus on healthier lifestyles. That creates “significant growth potential” for the combined group, Virgin Active said. The deal values Real Foods at 28.6 million pounds.

Virgin Active has more than 230 clubs and about 1 million members worldwide, while Real Foods owns 204 sites with brands like Kauai, many of which are already in Virgin gyms.

Brait, Virgin’s majority owner, announced a plan to sell all assets in late 2019 following an overhaul. A disposal of Virgin Active, which accounts for almost half its value, was delayed because of the pandemic. The firm was forced to close outlets in South Africa and the U.K. for lengthy periods due to coronavirus lockdowns.

Brait has said it will update investors on initial public offering plans for its Premier Foods unit in South Africa this year. The company hired Ethos Private Equity to run its portfolio following the 2019 restructuring.