- Sports Arenas and Training Facilities
- Theatres and Concert Halls
- Spectator Sports
- Adventure Sports Operators
- Visual and Performing Arts Studios
- Museums and Art Galleries
- Video Game Parlors
- Gaming Arcades
- Golf Courses & Country Clubs
- Amusement Parks
- Casinos and Slots
- Lottery Businesses
- Entertainment Businesses, NEC
Beacon has successfully advised multiple businesses in the entertainment and recreational services industry.
Beacon was engaged by a niche sports and recreational brand with multiple state-of-the art complexes across Ontario. The business had experienced strong revenue growth and cash flow generation since inception. Due to its niche offering the business very little competition and was able to establish itself as the industry leader in its region. The owners, at the time, had decided divest a portion of their business due to resource constraints. Due to Beacon’s strong outreach across North America, Beacon was chosen as the exclusive broker and provided sell-side transaction advisory services through the entire sale process.
Beacon began by compiling a fairness opinion to determine the business’ true fair market value and proceeded to compile deliverables and confidentially market the mandate to potential buyers. As a cash cow with a wide economic moat, the business was an excellent acquisition opportunity for an investor or a private buyer. Moreover, the business’ state-of-the-art facility was strategically located in an affluent neighborhood in Brampton. Beacon was confident that we could successfully attract a strong pool of buyers for the business. Based on the seller’s criteria and vision, as well as our financial acumen, we were able to pre-screen buyers and solicit offers from serious buyers.
Beacon’s team assisted our client through every step of the sale process, and successfully completed the transaction. Beacon effectively negotiated an asset transaction with a private buyer who had the financial means to successfully grow the business. The deal was structured with a 3% deposit placed in trust upon execution of the asset purchase transaction. Our client (‘the vendor’) received 90% of the total payment at close. The remaining balance was structured as a vendor take-back at 5% interest, pursuant to the fulfillment of all closing terms. Beacon’s involvement allowed a successful transition completion ensuring that business value was not diminished in any way.
The entertainment and recreational services industry comprises various consumers discretionary services including areas such as sports, dance, tourism and gambling and other recreational activities. Businesses in this industry primarily rely on caterers and restaurants, alcohol distributors, sports merchandise retailers and other facility maintenance services. The entertainment industry has high barriers to entry and organizing large scale events requires high initial capital as well as strong industry connections and networks. The industry is in its growth stage with the exception of the gambling sub-industry which is in its decline stage. The industry grew between 3-5% annually over the last five years depending on the sub-industry and target demographic. Positive consumer sentiment, high discretionary spending and increasing exogenous income helped generate high demand. This trend will continue to generate demand going forward as affordability and standard of living continues to advance. In addition, increasing globalizations and demand from international tourists will further generate tailwinds for the industry. This growth in demand will partially be offset by rising interest rates and growing household debt which will reduce discretionary spending. Over all, despite a minor slow down in the rate of growth, the industry will continue to grow at a higher rate compared to the market.