Competitor Group Focusing On Organic Growth And Media Acquisitions After Recent Recapitalization, Owner Says
By Ilene Friedland for Mergermarket
9/30/2010 - Competitor Group, the San Diego, California-based entertainment company focused on endurance sporting events, is pursing both organic growth and acquisitions, said David Moross, CEO of Falconhead Capital.
Falconhead Capital, which owns 86% of Competitor Group, created the Competitor Group in 2007 by acquiring and combining Elite Racing (which manages marathons), Triathlete Magazine, and Competitor Publishing. Competitor Group sponsors participatory endurance sporting events including running, cycling, and triathlons in 36 US cities and owns four related sporting magazines. The company is now interested in acquiring additional endurance sports magazines and other media in the US, Europe, Asia, and Australia. Moross added that Competitor Group is likely to acquire or develop several endurance sporting events in Europe and then develop an online presence before acquiring print publications. He noted that the company recently acquired a publication in Australia.
Competitor Group just announced that it has secured a USD 57.5m senior secured credit facility from Golub Capital to recapitalize the company. The new funding will be used for both acquisitions and organic growth. Part of the funding was also used to provide dividends to CGI’s shareholders.
The company’s annual revenues are over USD 50m and it is cash flow positive. Revenues come from sponsorship fees for the sporting events, marketing and advertising fees from the events and magazines, magazine subscriptions, and registration fees for the events.
Moross said that CGI has now added entertainment to many of the sporting events by having rock bands at every mile and a large concert at the end of the event. He said that these events are very attractive to sponsors and advertisers because the audience and participants are a very desirable demographic with large incomes, a high level of education, and are very active computers users. He noted that the company’s web site, competitor.com, has over 1.5 million unique monthly visitors and 25 million page views per month.
Moross added that along with providing revenues for Competitor Group the races also bring in approximately USD 40m to 100m in income to the cities where they are held because about 60% to 70% of the race participants are from out of town.
Falconhead worked with the law firm Kirkland and Ellis on the acquisition of Elite Racing. The company did not work with an investment banker.
Moross said that Falconhead Capital generally holds investments for three to seven years and there is no rush to sell the Competitor Group now while the company is experiencing major growth. However, he did say that at some point Competitor Group could be attractive to some of the major entertainment companies like Disney and Sony. An IPO is also possible due to the company’s rapid growth and strong cash and revenue position.