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Private Equity takes on Multisports

Watching Man U beat Aston Villa 2-0 in the FA CUP:

My two cents: this is great for the babitts/duke and hopefully this will bring more exposure to our sport and support for our professionals. I do hope they are patient though. And finally, please, someone at Falconhead – hire a site manager to fix that horrible embarrassment of a site called triathletemag.com. I’m serious, that site needs serious attention – and yes as of 10pm EST tonight they have yet to report the news on their site.

This is a link to an LBO Wire story on the deal, with the press release below. Falconhead also posted the interview with slowtwitch.com Empfield.

NEW YORK & SAN DIEGO – (BUSINESS WIRE) – Falconhead Capital, LLC, a private equity firm specializing in investments in sports, leisure, lifestyle, and media focused businesses, today announced that it has simultaneously acquired three separate enterprises in the endurance sport event and publishing industries and combined them to form a major new platform company, which will be known as Competitor Group, Inc. (“CGI” or the “Company”).

At inception, CGI is the largest media and event based enterprise in the endurance sport space, with total monthly magazine circulation of approximately 500,000; marathons, triathlons, cycling and other endurance events in sixteen major cities with more than 150,000 participants; and a unique opportunity to leverage its media and event assets into a major global enterprise. Additionally, CGI boasts the preeminent new media platform in the sector.

The three acquired companies, all of which are based in San Diego, Calif., the endurance-sport capital of the world, are Elite Racing, Inc. (“Elite”); La Jolla Holding Group LLC, doing business as Triathlete Magazine (“Triathlete”); and Competitor Publishing, Inc. (“Competitor Publishing”).

As a result of the transactions, financial terms of which were not disclosed, Competitor Group, Inc. is now the largest media and event business exclusively focused on the endurance sport industry-principally including running, cycling and triathlons-a rapidly growing, $1.3 billion industry with more than 3.4 million active participants nationwide, most in the attractive 25 to 54 years old demographic, and with an average household annual income consistently in the $75,000 to $95,000 range.

Elite Racing is the largest owner and operator of running events in the United States, with eight events across the country. Currently slated events for 2008 include races in San Diego, San Jose and Carlsbad, Calif.; Phoenix, Ariz.; San Antonio, Tex.; Nashville, Tenn.; Virginia Beach, Va.; and Philadelphia, Pa. Elite is a diversified business with several income sources including, among others, participant entry fees, sponsorship, TV, merchandise, and fitness expos.

Triathlete is the largest triathlon consumer magazine and online content provider in the industry, with total monthly circulation per issue of about 60,000.

Competitor Publishing publishes regional magazines with controlled monthly circulation totaling about 450,000. The magazines are a major resource for endurance events, training tips, nutrition and products. Competitor Publishing also owns the Muddy Buddy endurance events, which take place across the country and feature two-person teams competing in a bike/run relay over six- to seven-mile courses. Featured events for 2008 will take place in San Jose and Los Angeles, Calif.; Boulder, Co.; Chicago, Ill.; Richmond, Va.; Atlanta, Ga.; Orlando, Fla.; and Austin, Tex.

David S. Moross, chairman and chief executive officer of Falconhead Capital, said: “This deal is enormously exciting for Falconhead and transformative for the endurance sport industry. It is consistent with our strategy, which has long focused on investments in sports, leisure, lifestyle and media related businesses.

“It creates, at inception, the nation’s leading media and event company focused on the passionate and upscale amateur participants in endurance sports, a fast-growing industry in which, for example, triathlon participation has been growing 23 percent annually over the past five years.

“Also at inception, CGI owns and operates endurance and fitness events in 16 major cities with more than 150,000 annual participants; consumer magazines with about 500,000 total monthly circulation; specialty publications such as race programs, buyer’s guides, and endurance events books; multiple leading websites; and a weekly radio show.

“In short, the formation of Competitor Group, Inc. represents a significant opportunity for Falconhead to leverage CGI’s current assets into the number-one online destination/community for endurance athletes, incorporating authoritative ‘insider’ content, race results, merchandise and streaming video, as well as such growth areas as advertising and sponsorship revenue through the creation of an integrated CGI sales force; and to further expand CGI’s national footprint both organically and through further acquisitions,” Mr. Moross said.

To lead CGI’s management team and drive the rapid implementation of its business and growth strategy, Falconhead has named one of its senior operating executives, Peter Englehart, chief executive officer of CGI, effective immediately. Mr. Englehart, 55, who will shortly be moving to CGI’s headquarters in San Diego, has been a Falconhead operating partner for the past three years. He was previously founder and president of the Convention & Trade Show Television Network, LLC (CTS-TV); senior vice president of programming and production for the Outdoor Life Network (OLN); and director of program planning at ESPN. “Peter’s extensive experience, knowledge and relationships in the endurance sport industry and related media will be tremendously useful in helping CGI execute its business plan and growth strategy,” Mr. Moross said.

Falconhead Capital, LLC (www.falconheadcapital.com), with $500 million of assets under management, is a private equity firm established in 1998 to provide investors with significant long-term capital appreciation by investing globally in consumer-focused businesses in the sport, leisure, lifestyle, recreation and related consumer categories. In addition to Competitor Group, Inc., Falconhead Capital’s current portfolio investments include Extreme Fitness, Inc., Our365 (formerly Growing Family), Escort, Inc., and Premier, Inc. Past Falconhead portfolio investments including, among others, National Powersport Auctions, Maritime Telecommunications Network, The Golf Warehouse, and ESPN Classic Europe, LLC.

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January 8, 2008 at 9:08 pm
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