MBK to buy stake in Korean golf course business
MBK Partners, which completed its acquisition of Japanese golf course operator Accordia Golf earlier this year, has agreed to take a stake in the golf course management business of Korea-listed Golfzon.
According to a filing, Golfzon will spin off Golfzon County and MBK will participate in a new equity issuance amounting to one share less than the division's current total outstanding shares. The capital will be used to acquire new golf courses and expand the related services business.
Golfzon is best known for developing a golf simulator currently available in 5,000 locations across 43 countries. STIC Investments backed the business in 2008 and took it public three years later. Revenue came reached KRW216.9 billion last year, up from KRW210.6 billion in 2015, while net income held steady at KRW36.5 billion.
The company has expanded its business over the years, introducing a retail channel for golf products, a training academy, and outdoor driving ranges. It entered the golf course management space in 2011 and Golfzon County now has six courses listed on its website.
MBK, which closed its latest North Asia buyout fund at $4.1 billion last December, submitted a tender offer for Accordia in November of last year and completed the process in the first half of 2017. The deal valued the company at approximately JPY102.5 billion ($912 million).
Accordia was created by Goldman Sachs in 2002 following the acquisition of various golf assets from Nitto Kogyo, a local real estate developer that had filed for bankruptcy protection. It completed a string of bolt-on acquisitions and listed the business in 2006. Goldman completed its exit in 2011.
As of March 2016, Accordia managed 136 golf courses, comprising 43 self-owned facilities and a further 93 operated on a contract basis. It also had 21 driving ranges - 21 self-owned and five leased - as well as another 623 affiliated driving ranges. Revenue came to JPY48.5 billion for the 2016 financial year, down from JPY63.9 billion in 2015. Net income fell to JPY5.46 billion from JPY6 billion.
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