SMB PE Weekly: Buy An 18- Hole Public Golf Course

Welcome to our inaugural newsletter.

This newsletter is designed for those interested in Micro Cap Private Equity.

We target Small Business (SMB) M&A acquisitions in Boring Businesses + Micro SaaS.

Our target investment mandate is for profitable, cash-flowing businesses under $10M in total enterprise value.

Each week we will post the most compelling deals to readers on our Newsletter.

Deal Of The Week:

1. 18-Hole Public Golf Course + Restaurant Grille

1. 18-Hole Public Golf Course + Restaurant Grille

Deal Summary Terms:

• Location: Southeast USA

• Revenue: $2.4M Annually

• Annual Profit: $600K

• Profit Margins: 20 - 25%

• Asking Price: $4M

• Ask Multiple: 6.6x

Golf Course Overview:

• 18 Hold Public Golf Course with links-style layout

• 6,700 yards from the back tees

• Full-length driving range

• Practice putting green

• Chipping Green

Bar & Facilities:

• Full restaurant and grill

• 200 person event center

• Full Pro Shop

• Small apartment above pro shop rentable for Air BnB

Investment Highlights:

• If you have ever wanted to own your very own 18-hole golf course with friends, here is your opportunity

• For entrepreneur passionate about golf, this is an opportunity with $600K+ SDE right in the target zone of a lot of first time Search GPs

• The owner enjoys a nice lifestyle business with profitable margins in established business

• Additional white space opportunity in the form of a large event hall for weddings, gatherings, etc

Investment Risks and Problems:

• The owner has listed the asset at a premium to the market

• Looking at BizBuySell’s Entertainment and Recreation comparable prices - Golf Courses and Services trade for 2.59x earnings on average

• From a valuation perspective, we have a gap of $2.4M in price between the Owner Ask and Market Price:

  • Owner: Listed the golf course at 6.6x Profit or a $4.0M Ask Price

  • Market Price: $600K Profit x 2.59x = $1.6M Market Price

  • Valuation Gap: $4.0M Ask - $1.6M Market = $2.4M Difference

• Additionally, a golf course can come with a number of downside risks so would have questions for the owner in a few areas

  • High Capex:

    • Golf courses require significant capex to build and maintain.

    • Would want to understand the remaining value on the equipment and facilities and what big capex items coming in the short term (next 1-3 years)

  • Operational Costs:

    • Golf courses require a big staff to water, maintain and run day-to-day

    • Would need a deep dive with the staff to understand any big needs or issues with current staff

  • Competition:

    • Like any other industry, Golf courses have a lot of competition in certain areas

    • Before buying this asset would review any other courses in the area, specifically any “new” courses that may have taken market share in recent years

Plenty more work to do here during due diligence for a Searcher, but definitely a fun deal to look at.

Reveal below disclaimer for paid users.

Look forward to next week 👇

This newsletter is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services. Please consult a legal professional and tax professional before moving forward.

Listing Reveal Below: