Seeking capital.
***Context***
Founded in the early 2000s, FunCo has become a leading family entertainment destination in Mexico, operating over four dozen locations in high-traffic shopping malls across major metropolitan areas. Recognized as a top-of-mind brand in its segment, FunCo is owned by its founder, a seasoned executive in the entertainment and amusement park industry, alongside a minority financial sponsor partner.
Despite its strong operational recovery post-COVID, FunCo’s growth is currently constrained by an over-levered balance sheet, a result of large capex projects completed in###-###-#### With operating cash flows already exceeding pre-COVID levels, the business is poised for a turnaround through balance sheet restructuring.
***Deal Overview***
We are seeking a $15M primary capital injection to acquire a controlling equity stake in FunCo, valuing the company just below ~5.0x LTM EBITDA. Cash proceeds will be used to:
1. Partially repay debt.
2. Restructure the remaining debt load.
3. Provide short-term liquidity for operations.
Additionally, there is an opportunity to acquire the minority stake held by the financial sponsor through a secondary transaction, further consolidating equity ownership.
***Investment Highlights***
- Value creation: mostly created with entry at an attractive multiple, balance sheet deleveraging to unlock operational flexibility.
- Growth Potential: Strong inquiries from major commercial real estate developers to open new anchor locations and acquisition opportunities of smaller players.
- Conservative return scenario: A 5-year holding scenario with no store expansion, inflation-only revenue growth, flat EBITDA margins, and no exit multiple expansion yields projected returns of 35%+ p.a. in MXN.
If you’re an advisor or investor interested in learning more about this opportunity and SetteCapital, please feel free to contact me at --@----.com
industry
Consumer Services
Consumer Services
location
Mexico
Mexico
revenue
$50
$50
ebitda
$10
$10
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