Therme Group is buying three resorts from a similarly-named company, expanding its footprint in spa operations following controversy over how the provincial government vetted the firm behind the Ontario Place development.
This week, Therme Group announced the planned acquisition from Thermengruppe Josef Wund, pending approval by German regulators.
Last December, the Auditor General raised concerns that Infrastructure Ontario did not ensure that the spas cited in Therme Group’s submission to the government in 2019 were, in fact, owned by the firm.
“We reviewed the six spas and found five instances where the spa cited in the submission was not owned or operated by Therme Group,” the Auditor General stated in the December report.
At least one of those spas carried the Therme name but belonged to Thermengruppe Josef Wund, a separate entity created by the late architect and businessman Josef Wund.
The Auditor General’s findings cast doubt on the Ontario government’s evaluation of Therme Group’s experience as a spa operator and its capacity to execute the Ontario Place project.
The deal offers a window into how the company is conducting its global expansion, but critics remain skeptical of its ability to succeed.
“It doesn’t change history,” said Ann-Elisabeth Samson, co-chair of grassroots organization Ontario Place for All.
“I believe it’s still true that they were not operating those facilities when they pitched to the Ontario government and misrepresented that they actually had been doing more … than they had,” Samson added.
“This is a company that is very rapidly expanding and growing. And I still haven’t seen proof that they can build and operate multiple projects at one time.”
Therme Group did not address Samson’s comments in its response to the Star.
In a press release earlier this week, the company said that its founder, Robert Hanea, had a close relationship with Josef Wund and his family.
“With the addition of these assets, Therme Group reinforces its scale and position as a leading operator of thermal wellbeing destinations, now comprising five locations and serving 5.3 million annual visitors,” the release read.
Addressing a question on whether Therme has secured financing for the Ontario Place project, Therme Group said that it’s still in the design phase and the company has not yet taken possession of the site.
“While we have allocated all the necessary internal capital and resources required to progress the project to the next stage, external funding is typically secured close to start of construction — this is the market norm.”
Scott Clark, spokesperson for the Ministry of Tourism, Culture, and Gaming, directed questions related to Therme Group’s corporate structure, financing or other business matters to the company.
“Every submission through the call for development process for Ontario Place underwent thorough evaluation and financial review,” Clark wrote in a statement.
It remains unclear how the transaction will impact Therme Group’s financial health and the level of debt it holds, though it may give a clue into how funding for the $700-million Toronto spa could be obtained.
Therme Group is acquiring the spas in Euskirchen, Sinsheim, and Titisee-Neustadt, in Germany, through Therme Horizon — a joint venture with private equity giant CVC Capital Partners.
The partnership, which was announced in June, was valued at €1 billion and has Therme Group and CVC as equal partners in the holding company.
Therme Horizon comprises Therme Group’s two other operating spas: Therme Bucharest and Therme Erding, which Therme Group acquired from the Wund family in Dec. 2024.
CVC is also co-investing in the development of Therme Manchester, which, according to Therme Group, broke ground this year and is expected to open in late 2028.
These investments are being made through a €26-billion fund raised by CVC in 2023 to back businesses across Europe and the Americas.
Jon Shell, chair of nonprofit Social Capital Partners, which researches the impacts of private equity investments on communities, said CVC’s involvement likely means that Therme Horizon’s current debt level is “sustainable.”
“It’s unlikely for a large private equity fund to invest in a platform like this without having access to future developments,” Shell, who is not involved in the deal, added.
He speculated that the Ontario Place project could eventually be wrapped into the joint venture, which would likely mean CVC co-owning it.
“It would be surprising if they hadn’t already discussed being involved in the new projects under development,” he added.
Therme Group said that the Ontario Place project is not part of the Therme Horizon joint venture.
CVC did not respond to the Star’s request for comment in time for publication.
In August, a Star investigation found that a European auditor twice flagged that unresolved issues around financing and execution related to several of Therme’s global projects made the future of its development corporation uncertain.
At the time, Therme said the auditor’s warnings did not reflect the strong financial footing of its global business.
With files from Emma McIntosh
