Falconhead Capital is still relishing the sale of Competitor Group Inc., the sporting event and media company that operates Rock 'n' Roll Marathon. But don't expect Falconhead to slow down when it comes to M&A in 2013.

"We're certainly looking at similar concepts in regard to leisure and sports that are interesting to us," Falconhead chairman and chief executive David Moross tells Mergers & Acquisitions.

The New York-based private equity firm is still riding high on the success of Competitor Group, which it established in late 2007 after merging three portfolio companies: Elite Racing Inc., La Jolla Holding Group LLC and Competitor Publishing Inc. Falconhead quickly expanded the company when it purchased Inside Communications Inc., a publishing company geared toward endurance sports, in February 2008.

San Diego-based Competitor has gone on to become a multimedia company with five publishing properties-Velo, Inside Triathlon, Triathlete, Competitor Magazine and Women's Running. It also operates a total of 83 racing events across the world, including the Muddy Buddy series in eight markets.

In June, Falconhead finally felt the company was ripe for a sale and hired advisory firm Perella Weinberg Partners LP to run an auction. San Francisco-based private equity firm Calera Capital emerged as the winning bidder.

While the price tag remains undisclosed, Moross says Competitor grew about 40 percent per annum. "Ebitda also grew about three to four times from where we started," he adds, crediting Competitor's success to smart investing.

For example, the deal underscores the rising popularity of both competitive and recreational running, particularly the kind that deviates from traditional linear races.

"There are thousands, but what do we buy?" Moross recalls asking. "The industry is magnificently fragmented."

Through Competitor, Falconhead helped grow Competitor's TriRock Triathlon Series in seven markets and Rock 'n' Roll Marathon, in which race routes are lined with live bands and cheerleaders, in 32 markets. Muddy Buddy, in its own right, has become one of the four most popular obstacle courses that combine mud and trail runs, the others being Spartan Race, Tough Mudder and Warrior Dash.

Indeed, investors have caught on to the financial rewards of owning competitive racing and obstacle course brands, Moross says, just not en masse.

Providence Equity Partners, for example, showed it was ahead of the game in 2008, when it acquired World Triathlon Corp., the Tampa Bay, Fla.-based company that runs the grueling Ironman races held around the U.S.

Then there's Peak Races, which runs the Spartan Race and Death Race. Founder Joe Desena, a managing director at Pittsfield, Vt.-based financial adviser Collins Stewart, has said he received numerous offers from interested buyers but so far hasn't shown interest in a sale.

To be sure, the time is ripe for deals. The difficulty is finding targets that have the loyal following that Rock-n-Roll has. Alas, Competitor's aggregate customer base now exceeds 7 million endurance enthusiasts and athletes. Moross wonders: will other brands achieve a similar cult status?

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