Merger and Acquisition Services
for the Fitness and Leisure Industry
Sports Club Advisors is a boutique M&A advisory and business brokerage firm focused on the global fitness, sports and leisure industry.
We specialize in helping clients buy and sell fitness clubs or sports businesses. In addition, we provide buy-side and sell-side advisory services, acquisition and facility financing, fitness club valuations, and feasibility studies, and consulting services for fitness clubs and related businesses. Our scope is not just limited to fitness clubs, we also work with owners of indoor sports or athletic facilities, boutique fitness and exercise studios, tennis and sports clubs, athletic training programs and camps, fitness equipment manufacturers, wholesalers and retailers, fitness industry franchisees and franchisors, club management software and fitness app developers, and other fitness and healthy lifestyle businesses.
Our industry focus and network of relationships in the fitness industry and capital markets enables us to deliver results for our clients. If you would like to explore selling your fitness club or sports business, or would like to raise growth capital to expand, please contact us at (224) 513-5142.
Selling a Fitness Center or Sports Facility
As a sell-side advisor, we draw upon our industry expertise to properly market each club to a highly targeted list of prospective buyers or investors. We leverage our network to help our clients maximize the value of their club or facility. We custom design each sell-side engagement based on the goals of our client and the unique characteristics of their club or business.
We offer two types of sell-side advisory services to our clients based upon the size of their companies.
Selling a Large Fitness Club
For fitness businesses and clubs with $1 million or more in revenues, we run a formal sell-side process during which we prepare a professional offering package including a seller profile, a confidential information memorandum, and an integrated financial model that describes your club – then we proactively market your fitness business or club to a group of targeted buyers. This way we increase the probability that you will receive multiple offers for your business and get the best combination of price and terms. We manage the process and work closely with you from start to finish to ensure we accomplish your goals.
Selling a Small Fitness Club
We also offer a service custom tailored for small fitness clubs and small sports related businesses. The Sports Club Advisors, Small Business Package is available for fitness clubs and other fitness related business with less than $1 million in revenues. For our small business clients, Sports Club Advisors will prepare a professional Executive Summary describing your club which will appear on our website and will be sent to our registered buyers. If a buyer is interested, he or she will contact us, we will answer their preliminary questions, and if they are interested in learning more, we will introduce them to you so you can answer their questions, arrange a visit and negotiate a transaction. We do not get involved in arranging the transaction, but we are here to answer questions and provide you with step-by-step advice and guidance along the way. This more limited role enables us to reduce our fees and allows our clients to keep more of the sales proceeds.
To learn more about selling your fitness club or sports business, please contact us for a no-cost, no-obligation conference call. We would be happy to answer any questions and help you explore your options.
Buying a Fitness Club or Sports Facility
We frequently represent buyers and advise them on the purchase of a sports or fitness club or other sports-related asset. We work side-by-side with our clients to identify the best investment opportunities and to coordinate all aspects of the transaction.
Sports Club Advisors can help with each step of the process including:
- Developing a strategic plan and related acquisition criteria
- Identifying acquisition opportunities based on your investment objectives
- Contacting possible targets on your behalf
- Arranging initial conference calls or meetings with interested parties
- Performing comprehensive financial and industry due diligence
- Determining an appropriate valuation for the club, its facility and other assets
- Assisting with securing acquisition financing proposals from multiple sources to ensure you get the best possible terms
- Negotiating the terms of the transaction
- Facilitating legal documentation
- Managing public relations post-closing
Give us a call to learn how we can help you acquire a business.
Valuation of Health & Fitness Clubs and Sports Facilities
Sports Club Advisors provides business valuations for sports and fitness related businesses, including but not limited to, tennis clubs, indoor sports facilities, health and fitness clubs, swim clubs, and other membership-based sports businesses.
These valuations are often used in conjunction with an M&A transaction or a capital raise, but are also used in shareholder agreements, shareholder disputes, and divorce proceedings.
Our principals have completed over one hundred valuation projects and have written two books on business valuation, including the The $10 Trillion Opportunity: Designing Successful Exit Strategies for Middle Market Business Owners, Second Editionand Business Valuation For Dummies.
Our business valuation services include:
- Full analysis and bench marking of all relevant revenue (memberships, court or rental income, lessons or other programs, tournaments, retail, restaurant or concessions, etc.) and cost drivers (facility, payroll, operations, programs, etc.)
- Detailed review of real estate or lease economics
- In-depth analysis of capital structure including any contingent liabilities
- Thorough review of all key contracts (leases, coaching, sponsorship, tournaments, etc.)
- Use of three valuation methodologies, including market comparable transactions
To learn more about our valuation services please contact us for a free, confidential, no-obligation consultation.
Feasibility Studies for Health & Fitness Clubs and Sports Facilities
A feasibility study provides an objective, third party analysis of the viability of a health, fitness or sports facility and helps buyers, lenders and investors answer the fundamental, “is this a good investment?” No matter how good you think a club, concept or location may be, conducting a feasibility study is critical in helping you determine if the business idea and/or location is viable. Hiring knowledgeable and experienced professionals to prepare a feasibility study is a small price to pay if you consider about how much time, effort and money could be lost if the business concept or opportunity turns out not to be viable.
Our feasibility studies analyze trade area demographics for targeted market segments and the specific financial model of the proposed fitness club or sports facility. This analysis allows us to determine the available untapped demand in the market area and the financial viability of the club or sport facility given the proposed business model and financing structure. The primary sections of our feasibility studies are outlined below.
1) Service Offerings
We start by clearly defining the service offering and the target consumer. This would include detailing a specific basket of service offerings and their respective pricing. We develop a market segmentation based on key variables that define the respective markets (simple example below) and provide profiles for each of the market segments. The market segmentation allows us to clearly define who the club is targeting as an end user and articulate the key demographics and traits of this customer. This definition helps to then properly size out the market, and serves as a critical tool in defining later marketing strategy and messaging for the club.
2) Primary & Secondary Market Size: Trade Area Analysis
An analysis of a club’s primary & secondary markets, also called a trade area analysis is an essential component in the feasibility study. This analysis provides an understanding of the size of the potential opportunity in the area, and identifies any barriers or challenges in realizing that opportunity. We develop a basic 5 to 8 minute and 10 to 12 minute drive time (and/or walk time) polygon to define these trade areas.
Then we layer on heat maps, or color coded representations, of our target consumer population in these market areas to show where your ideal customers are located. With this market segmentation completed, we examine a number of other important variables, including market area demographics like median age, household income, and educational attainment which are highly correlated to adoption rates for fitness clubs and sports facilities.
3) Market Potential
Next, we identify the individual competitors or substitute offerings in your trade area to understand how well the potential market is currently served. Based on the market area demographics and standard industry membership profiles, we identify the gap between the market potential and the served market as well as the amount of leakage from the trade area to competitors outside the perimeter. This allows us to define the untapped potential in your market.
4) Market Structure: Competitive Strength/Placement
Next, we consider the competitive structure of the market area, building detailed profiles of each of the competitors in the market area and on the perimeter so you can understand how the proposed service offering compares to current options in the market. These detailed competitor profiles highlight key characteristics of each club’s offering including: dues structure, range of programming, estimated membership size, customer ratings, estimated gross revenue, hours of operation, unique service offerings, brand positioning, etc.
5) Market Trends/Business Climate
We also provide a general overview of current trends in the fitness and sports club market that could affect future operations. In addition, we complete a regional economic analysis to understand any trends that might affect the club or facility’s success. Examples could include major new employers moving into the area, regional development plans, or trends in regional population growth or demographics.
6) Margin Potential: Top-line and Cash Flow Model
An important part of our feasibility study is a detailed financial model that translates our observations about the market and the club’s service offerings into a top line revenue projection for the club that will allow you to analyze the sensitivity of the club’s financial performance to factors such as; service pricing changes and varying assumptions about membership sign-ups. The financial model also includes a set of 5 year projections including: profit and loss and cash flow.
A unique part of our feasibility study is the ability to use a Monte Carlo simulation or sensitivity analysis to determine the levels of risk associated with the key variables or success factors in our assumptions. The Monte Carlo simulation provides a range of possible outcomes and the probabilities that they will occur. It shows a range of possible outcomes, from going for broke and declaring bankruptcy (the worst case) to hitting the ball out of the park (the best case scenario) along with a range of possible outcomes for middle-of-the-road decisions.
If you would like a copy of a sample feasibility study or more information about our services, please contact Rich Jackim at (224) 513-5142 or at firstname.lastname@example.org.