Fun Ventures, a PE firm, is considering acquiring Nook Co., a hospitality group specializing in developing private island resorts, for $1.5 billion. The case involves market sizing, profitability analysis, and ROI calculation. Key steps include evaluating the island resort market size, calculating Nook Co.’s profit, determining the acquisition’s ROI, and assessing potential risks. The market size is estimated at $1 billion annually. Nook Co.’s 2019 profit is $84 million with a 30% margin. The calculated ROI of 12% falls short of Fun Ventures’ 15% target. Risks include unsustainable growth, environmental concerns, and regulatory issues. The recommendation depends on weighing the growth potential against the risks and ROI shortfall.