Case Study · Buy-Side M&A
Buy-Side M&A: A 4-Location Texas Fitness Acquisition for 2% Down
LCG sourced, structured, and closed the acquisition of a four-location fitness operation in Texas — $1.2M plus real estate, $450K SDE, fully absentee at handoff — for a medical-industry buyer based in Florida. The deal stacked SBA debt, a seller note, and an investor capital raise to land the buyer at the closing table with roughly $24K of his own money and a projected 200% cash-on-cash return in Year 1.
The Mandate
True Absentee Ownership, on a Part-Time Operator's Budget
A Florida-based medical professional engaged LCG with a specific brief: acquire a cash-flowing operating business he could own without leaving his medical career, in a category he had no experience in, in a state he didn't live in. The deal had to come with the management team already running it, financials that could underwrite on their own, and a structure that didn't require him to liquidate his life to close. Multi-unit fitness fit the thesis — recurring revenue, location-level managers, and an asset base in the real estate that could carry long-term equity alongside the operating cash flow.
The Target
Four Texas Locations, $450K SDE, Managed End to End
Four fitness locations across Texas, $1.2M purchase price plus the underlying real estate, $450K in SDE at close. Critically, the operation was already absentee in practice — each location had its own on-site manager, and a single GM oversaw all four. The seller wasn't running shifts. The infrastructure to hand off to an out-of-state owner already existed; the question was whether it could be preserved through close.
The Challenge
A 2% Buyer, Four Locations, Real Estate, and Three Forms of Financing
The complications stacked. The buyer didn't have the equity to close on his own, which meant a capital raise had to be sourced and placed on the deal's timeline — not weeks after. SBA financing across four operating sites plus the real estate added underwriting complexity that smaller dealmakers often won't take on. And because the buyer would never set foot in the business on a daily basis, the management team had to be fully vetted and contractually locked in before close. Any leadership gap — a wobbly GM, a manager planning to leave — would have killed the deal outright. On a sub-$1.5M transaction, keeping seller financing, investor capital, and SBA debt aligned in parallel required more coordination than most lenders or buyers expect at this deal size.
The Execution
Sourcing, Capital Raise, Debt Stack, and Management Lock-In
LCG ran the engagement end to end. We sourced the opportunity against the buyer's absentee criteria, structured the deal so the equity stack worked: 2% from the buyer, 13% raised through LCG's investor network, 10% seller note, and 75% SBA financing on the senior debt. We placed the investor capital on the deal timeline, coordinated SBA underwriting across the four operating entities and the real estate parcel, and worked with counsel to lock the existing GM and location managers into post-close terms before signing. The result: a financing structure that closed without the buyer fronting equity he didn't have, and an operating team that didn't blink at the ownership change.
The Outcome
Under 4 Months to Close, ~200% Cash-on-Cash in Year 1
The deal closed in under four months from signed agreements to full ownership transfer. The buyer is projected to earn approximately 200% cash-on-cash return in Year 1 on roughly $24K of his own capital. The GM and location managers stayed in seat with zero operational disruption at handoff. And because the real estate transferred alongside the operating company, the buyer now owns both the cash flow and the property underneath it — long-term equity compounding alongside the operating return. The broader point: the absentee playbook works at the lower-middle market. It isn't reserved for $5M+ EBITDA deals. With the right structure, a four-location operating business plus real estate trades for less than a down payment on a house in most major metros.
By the Numbers
Deal outcomes that speak for themselves.
From a stalled search to a closed deal and a growing business — in less time than most searchers spend reviewing CIMs.
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