The deal was backed by mid-market private equity firm Graphite Capital, with debt financing from Lloyds Bank.

The management team is led by Eric Dunmore, formerly finance director of the group, who will now become its chief executive. He is said to be making a significant personal investment in the buy-out. The existing operational management team will remain in place.

The seller is restaurant and club operator Longshot, whose chief executive Joel Cadbury founded The Third Space in 2001. Cadbury remains involved in the business as a non-executive director.

Managing Graphite Capital’s investment in the buy-out were partners Mike Innes and Mike Tilbury, and senior partner Andy Gray.

Gray comments: ‘Prospects are favourable for the health and fitness sector in the premium segment. The Third Space is a very attractive proposition and has excellent opportunities for expansion.’

The Third Space has 4,300 members, including professional athletes and footballers. Its facilities include a medical centre offering orthodox and complementary therapies, 30 different classes, 16 personal trainers, and a climbing wall.