Apollo Global to buy golf club operator ClubCorp for $ 1.1B
ClubCorp, one of the largest operators of golf and country clubs, has agreed to be acquired by private equity firm Apollo Global Management for about $ 1.1 billion, ending its search for an investor amid slowing membership growth and losses.
In the all- stock deal, shareholders of ClubCorp will receive $ 17.12 per share in cash, a premium of about 30.7% over ClubCorp’s closing stock price July 7.
In October, Dallas- based ClubCorp said it would miss its 2016 revenue and earnings guidance, driving investors to dump shares.
The stock is down 7% so far in 2017. In the first quarter, ClubCorp’s revenue rose 3% to $ 221.3 million. Its net loss narrowed 9.7% to $ 7.5 million. Its liabilities, including long- term debt, totaled $ 1.99 billion.
Founded in 1957, ClubCorp owns or operates more than 200 golf and country clubs and sports clubs, attended by 430,000 members. Some of its most prominent properties include Firestone Country Club in Akron, Ohio; Mission Hills Country Club in Rancho Mirage, Calif.; and The Woodlands Country Club in The Woodlands, Texas.
The golf country club business has been hurt partly by changing demographics. The patience- challenging sport has lost appeal among many Millennials, and falling club membership numbers nationwide reflect the trend, industry data show.
As of 2015, golfers ages 18 to 34 numbered 6 million, down from 9 million in the mid- 1990s, according to a 2015 National Golf Foundation report. Participation rates fell to 9% for that age group from 14%.
The deal is expected to close in the fourth quarter of this year. After the deal is completed, ClubCorp shares will be delisted from the New York Stock Exchange.
ClubCorp plans to issue a one- time quarterly dividend of 13 cents a share, to be paid July 28.
“With the support of the Apollo funds, we are confident that ClubCorp will be able to continue building on its success by providing its members with unrivaled experiences at its clubs,” John Beckert, ClubCorp’s chairman of the board, said in a statement.