Valuation — SDC

Methodology: rules/valuation-methodology.md. EUR primary, CZK at 1 EUR = 25 CZK. USD at 1 USD = 0.925 EUR. Bear-case bias per rules/analysis-rules.md. Every number is Estimated unless flagged Verified.

Inputs (from docs/financial-data.md)

Metric Bear Base Bull Confidence
TTM Revenue €6M €9M €13M Estimated (RocketReach $10.5M anchor, triangulated)
EBITDA margin 25% 38% 50% Estimated (6-FTE leverage if real; paid-only walled garden)
EBITDA (€) €1.5M €3.4M €6.5M Estimated
YoY growth 0% 4% 10% Assumed
MAU 55k 80k 120k Estimated
Paying users (concurrent) 18k 25k 35k Estimated
ARPU/month €20 €22 €26 Estimated

Method 1 — Multiples

Per valuation-methodology.md, niche/adult marketplaces trade at 1–3x EV/Revenue and 4–8x EV/EBITDA, with 30–50% discount vs mainstream for processor + reputation risk. SDC's 27-year brand and travel vertical justify anchoring above SpicyMatch's floor but below JoyClub's ceiling — midpoint of the discounted range.

Applied multiples (brand age premium + BBB overhang offset):

  • EV/Revenue: 1.1x (low) / 1.6x (mid) / 2.2x (high)
  • EV/EBITDA: 4.5x (low) / 6.0x (mid) / 7.5x (high)
Method Low Mid High
1.1–2.2x Revenue (base €9M) €9.9M €14.4M €19.8M
1.1–2.2x Revenue (bear €6M) €6.6M €9.6M €13.2M
4.5–7.5x EBITDA (base €3.4M) €15.3M €20.4M €25.5M
4.5–7.5x EBITDA (bear €1.5M) €6.8M €9.0M €11.3M

Multiples range (triangulated): €8M – €13M – €20M

Method 2 — DCF

5-year projection, WACC 15% (mid of sector band — reflects compliance + payment + BBB risk, partially offset by 27-year track record), terminal growth 2%.

Year Revenue EBITDA Tax (21% US C-corp equiv) FCF
1 €9.00M €3.42M €0.72M €2.55M
2 €9.36M €3.56M €0.75M €2.65M
3 €9.73M €3.70M €0.78M €2.75M
4 €10.12M €3.85M €0.81M €2.86M
5 €10.53M €4.00M €0.84M €2.97M
  • PV of 5-yr FCF @ 15%: ≈ €9.1M
  • Terminal value = 2.97M × 1.02 / (0.15 − 0.02) = €23.3M; PV = €11.6M
  • DCF enterprise value ≈ €20.7M (base)
  • Sensitivity ±30% on churn/ARPU: €12M – €20.7M – €30M

Bear DCF (rev €6M, EBITDA 25%, 0% growth): ≈ €7.5M Bull DCF (rev €13M, EBITDA 50%, 10% growth): ≈ €38M

DCF range: €7.5M – €20.7M – €38M

Method 3 — Asset Floor

Replacement-cost build-up:

Asset Logic Value
User base (paying) 25k concurrent × €120 CAC (premium segment) €3.00M
Dormant registered base 4M claimed × €0.30 reactivation value €1.20M (heavily discounted — most will not reactivate)
Brand / domain (27-yr, US premium brand) Comparable niche adult domain + brand sales €1.50M
Travel vertical (relationships + calendar + ops) 3-yr contribution margin replacement €1.50M
SDC Media content library (2018+) Replacement production cost €0.30M
Tech stack (web, apps, forums, events) 18 eng-months × €12k blended €0.75M
Mobile apps (iOS + Android established publishers) €0.15M
Trademark / IP portfolio (USPTO "SDC", "Swingers Date Club") Assumed modest €0.10M
Asset floor total ≈ €8.5M

Triangulated Range

Scenario EUR CZK (×25)
Low (walk-away floor) €8M 200M CZK
Mid (fair value) €14M 350M CZK
High (strategic ceiling) €22M 550M CZK

Triangulation logic: multiples mid €13M, DCF mid €20.7M, asset floor €8.5M → weighted (35% multiples / 35% DCF / 30% floor) = ≈ €14M mid. Lower weight on DCF than usual because it relies entirely on the unverified RocketReach anchor. Low anchored at asset floor; high at DCF base minus BBB and 2257 diligence haircut.

Offer

  • Recommended opening offer: €10M (250M CZK) — above asset floor, below multiples mid; anchors at the low end of verifiable value
  • Walk-away ceiling: €18M (450M CZK) — below DCF mid; preserves IRR cushion after integration + modernization cost
  • Target close price: €12M–€15M (300M–375M CZK)

Structure (recommended)

  • 55% cash at close (€5.5M–€8.3M) — lower than JoyClub's 55% floor cash because US LLC pass-through tax structure lets seller prefer faster cash realization; confirm with seller
  • 25% deferred earn-out over 24 months, tied to verified retained paying users + travel-vertical event count (€2.5M–€3.75M)
  • 20% escrow / key-person holdback 24 months (longer than JoyClub's 18mo because SDC key-person risk is higher) for reps & warranties, BBB-complaint resolution, 2257 compliance, travel-ops entity transfer, and tax exposures (€2.0M–€3.0M)

Conditions precedent (must clear before close)

  1. 3 years P&L + balance sheet + CEO Schedule K-1 reconciliation
  2. "SDC Media LLC" vs "SDC Media, Inc." entity reconciliation — confirm which entity owns domain, brand, users, travel ops, apps
  3. NC Secretary of State full entity extract + FinCEN BOI (via seller)
  4. Payment-processor statements 24 months; chargeback ratio ≤1.0%
  5. BBB complaint root-cause review — full complaint text, refund pattern, remediation commitment
  6. 18 USC §2257 custodian of records verification
  7. DMCA designated agent filing with US Copyright Office (current)
  8. CA / FL / NY Seller-of-Travel license status for travel vertical
  9. Travel-vertical cruise/resort contracts — assignability + change-of-control clauses
  10. GDPR Chapter V transfer mechanism (DPF participation or SCCs) for EU user data
  11. CSAM scanning tooling confirmed live
  12. Trademark assignment (USPTO) to acquirer SPV
  13. Key-person 18-month transition agreement + personal introduction to all travel partners
  14. Loaded headcount disclosure (6 FTE + contractors + travel ops)
  15. No undisclosed FTC / state AG / law-enforcement / litigation matters

Walk away if

  • Verified revenue <€5M TTM (vs bear case €6M)
  • BBB complaints reveal systemic refund-dispute pattern affecting >2% of paying users
  • Any 2257 compliance failure discovered
  • Travel vertical legally housed in entity seller refuses to transfer
  • CEO refuses to sign 18-month transition + travel-partner introduction commitment
  • Chargeback ratio >1.5%
  • FinCEN BOI reveals undisclosed beneficial owner
  • Any prior processor termination discovered undisclosed
  • Entity reconciliation reveals brand/domain ownership is in a third entity not offered for sale