Over the weekend Apollo Global Management, a value-oriented
investor in private equity, credit and real estate, bought ClubCorp, the
largest single owner-operator of golf and country clubs in the U.S. for $1.1
billion.
In Jacksonville, that includes Queen’s Harbour Yacht &
Country Club and Deercreek Country Club in Jacksonville, and Marsh Creek
Country Club in St. Augustine.
The company had undergone several transitions since the death
of founder Bob Dedman who started the company in 1957 with Brookhaven Country
Club in the Farmers Branch suburb of Dallas. It went on to own golf and
city clubs in many locations in the U.S. and around the globe. At its height,
it employed 18,000.
The Dedman family operated the organization for a number of
years before selling out to KSL Recreation and another party for $1.8 billion in 2006. Dedmans kept Pinehurst Resort.
KSL operated the clubs as well as others it acquired, sold some of the larger resort assets,
such as La Costa and Doral, and then took ClupCorp public in 2013, raising
money to pay down the debt it had absorbed with the acquisition, according to
the Wall Street Journal at the time.
Retirement of the former CEO Eric Affeldt preceded the sale
by three months.
A few things are apparent after this purchase by Apollo:
1. Apollo never buys at the top, and that’s
reflected in the price. They are value
investors, i.e., they acquire distressed or what they perceive to be distressed
assets for turnaround.
2. The golf course
business may have reached the bottom, at least for the larger players.
3. There
is still investment and economic value in the golf course business, at the
right price, as proven by Apollo’s acquisition.
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