Some businesses are priced at less than the value of their assets. That's the case with Deer Valley Racquet Club, which sits on nine acres in Boone, North Carolina, a college town in the Blue Ridge Mountains. Architect and owner Ray Howell built the tennis club in 1986, partly so his family would have a place to play the sport they loved. The club has six outdoor and three indoor courts. At its peak, in 2004, Deer Valley had 335 member families and offered a full schedule of tournaments and activities.

In recent years, Howell, who turns 75 this month, has had less energy to devote to the business. He shut down a struggling restaurant on the property and canceled most tournaments. Membership has dwindled, and all but one of the pros have left to work elsewhere. "Parents used to put their kids on the bus straight to Deer Valley to participate in our clinics," Howell recalls. Today, only an office manager and one part-time instructor remain. Howell took no compensation in 2007, and Deer Valley didn't make a profit after taxes, prompting the sale.

Company Financials 2005 2006 2007*
Gross Revenue $311,027 $299,930 $236,281
Discretionary Cash Flow $92,209 $84,491 $5,565
Member Families 310 260 205


$2.85 million, which includes nine acres, the clubhouse, and extensive outdoor facilities, as well as fixtures, furniture, and equipment. Howell also owns a condo complex next door; it is not part of the deal. The owner is willing to help finance a sale.

The property was appraised at nearly $6 million in 2007. So why is the owner asking for less than the value of the real estate? After taxes, "it is not a profitable business, but merely a wonderful facility," Howell says. "I'm 75, and I don't need the money. I want to quit."

As a hub of second-home owners and outdoorsy types who hike and ski, Boone is a promising market for tennis. And the sport is enjoying higher levels of participation in the U.S. than it did 10 years ago, according to the U.S. Tennis Association.

Deer Valley's membership base is too small. Brian Woodworth, a business appraiser in Mill Valley, California, who specializes in health clubs, says a buyer will have to invest heavily in marketing in the first few years to put the club on a sound financial footing.

The club is certainly priced to sell and offers some possibilities. Part of the property could be developed into a hotel or a spa. But only patient investors who love tennis and are willing to commit time and money to a turnaround should consider this deal.

Inc. has no stake in the sale of the business featured. The magazine does not certify the accuracy of financial or other information provided by the seller. Inquiries should be directed to Buster Brown of Brown Properties at 828-274-3725 or To view photos, go to

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