French climbing-centre operator Climb Up is getting ready for French consolidation in late 2024, as it looks to tie up with competitors, Founder Francois Petit told Mergermarket.

The EUR 30m-revenue company would consider a merger, or buying smaller to same-sized direct domestic competitors, as the market is facing some macro headwinds this year, Petit said. The increasing costs of energy and materials are making indoor sports centre operators more vulnerable, especially since 2020 and 2021, when they were forced to close due to the pandemic, he added.

Consolidation will be a healthier way to expand in French regions rather than building more centres, as construction costs have also increased by 20%, he said.

Petit is not in talks yet with potential targets or merger partners. The company is receiving advice from investment bankers and its current minority shareholder Calcium Capital, Petit said. The company plans to close a deal in 2024, he added.

Petit named same-size group Arkose, Block’Out, Vertical Art, Climbing District and Altissimo, which has 10 climbing centers, as the main players in France. Climbing District announced it raised EUR 10m last month from VC firm Peiade Venture and PE firm 123 Investment Managers, taking its total financing to date to EUR 15m.

The company has 30 climbing centres in France and generates EUR 6.5m EBITDA.

Calcium Capital will back Climb Up on this first consolidation phase and could then exit the capital in two years, Petit said.

Climb Up has raised a total amount of EUR 16m, including EUR 15m in 2019 from Calcium Capital for a minority stake, and EUR 1m from Bpifrance in 2017. This funding enabled the group to buy centres and build new ones across France, Petit said. The company also raised EUR 12m in debt in April 2021, after the pandemic, he said. Petit, a professional rock climber and engineer, remains majority shareholder of the company, which he founded in 2011 after winning several lead climbing world cups.

Climb Up will look to raise EUR 20m to EUR 30m in convertible bonds, equity and debt to refinance its debt in late 2024, Petit said. Petit could lose his majority stake in the capital after this round, he said. The company is one of the leaders in its market, therefore it receives regular approaches from investment funds willing to invest, he added.

Petit named Compagnie des Alpes [EPA:CDA], a French ski-resort operator said to be the frontrunner to acquire Urban Soccer, a France-based operator of 5-a-side football pitches and football leagues organiser, as an example of a deal in the indoor sports sector.

Climb Up will also look to expand organically in France and especially in Paris, where it is facing high competition, Petit said. Sector revenues have doubled in Paris since the pandemic, as climbing centres are popular with young adults, who like to meet up in them, and companies such as Climb Up and Arkose offer a co-working site and bar and restaurants, Petit said.

The company could also expand in France’s neighbouring countries through local partnerships, he said.

Climb Up has 30 climbing centres out of the 200 in total in France, Petit said. It has a strategy of opening several climbing centres in one city, so it has a 75% market share in Lille, Marseille and Bordeaux, and the world’s largest centre in Aubervilliers near Paris. It employs 550 people.