Emotion Fitness
MeDaVinci believes there are significant opportunities for the successful commercialisation of businesses that address health and wellness considerations in the emerging markets of Central and Eastern Europe (new EU countries). One of the opportunities concerns the establishment of fitness centres in provincial and mid-size towns throughout these markets. The membership percentage in these markets is only circa 10% of the levels of membership of fitness centres in developed markets (Western Europe, USA) while existing facilities in these emerging markets outside the capital cities, if at all available, generally offer poor quality.
MeDaVinci has acquired a 47% stake (for EUR 540,000) in Emotion Fitness Kft ("Emotion Fitness"), a Hungary-based company established in November 2005 to exploit this strategy.
Over the next 36-48 months Emotion Fitness intends to roll out its fitness centres initially throughout Hungary and Romania. Emotion Fitness already has two active sites in Balatonszárszó (opened in May 2006) and Keszthely (opened in July 2006) in Hungary, a third site in Vezprem under construction (purchased December 2006 and expected to be operational in May 2007) and a number of further sites under negotiation. MeDaVinci will assist Emotion Fitness in its growth ambitions with the organization of required debt and equity capital and in relation hereto MeDaVinci may provide Emotion Fitness with convertible loan notes subject to mutually agreeable milestones.
The benefits of this strategy are two-fold: Firstly, in MeDaVinci's opinion, the climate of fast growing consumer spending, particularly amongst the upper middle classes, and a heightened awareness of health and well-being, coupled with a relative absence of high quality consumer services in this field, suggests an ideal opportunity to cater for this market. Secondly, as Emotion Fitness will preferably own the real-estate, the Company will be benefiting from the capital growth in the burgeoning property markets in these regions.
Emotion Fitness' predominantly Western European originated management has a high level of knowledge in the field of the establishment and operation of fitness centres, the legal environment of new European emerging economies and local real-estate expertise. MeDaVinci will assume an active role in Emotion Fitness' development.
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