MBK-owned Accordia Golf to buy courses from Singapore trust

The offer implies a purchase price of S$0.732 per unit, a 22% premium to Accordia Golf Trust's (AGT) November 27 closing price, the last day of trading prior to the company announcing the bid. It also represents a 5% premium to AGT's current adjusted net asset value, according to a filing.

In 2014, the company became the first business trust to list on Singapore's main board comprising golf course assets in Japan. Most of the courses are located in the Greater Tokyo, Greater Nagoya and Greater Osaka regions. They received 5.7 million visitors during the 2019 financial year. AGT is expected to benefit from a gradual decline in the number of courses in Japan, while the playing population has been relatively stable in recent years.

Revenue – derived from green fees, membership subscriptions and restaurant takings – came to JPY50.7 billion ($470.6 million) for the year, down slightly on 2018. Meanwhile, the company swung from a net profit of JPY4.1 billion to a loss of JPY12.5 billion, largely due to impairment costs.

AGT courses are managed by Accordia, which already owns 28.85% of the trust and 49% of the trustee-manager. The company operates only 5% of Japan's approximately 2,400 courses, but locations close to major urban centers ensure strong patronage. Accordia had 3.48 million loyalty program members in 2019, which equates to over half the total number of golf players in Japan.

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, Accordia managed 134 golf courses, of which 44 were self-owned facilities and 90 were operated on a contract basis – down slightly from when MBK made its acquisition. It also had 22 driving ranges, including 17 self-owned facilities. Revenue for the preceding 12 months reached JPY47.7 billion, while operating income was JPY7.2 billion. Total visitors amounted to 8.4 million.

MBK recently closed its fifth North Asia-focused buyout fund at the hard cap of $6.5 billion. Accordia is not the firm's only golf asset. In 2018, it bought Golfzon County, Korea's largest golf course operator with seven public courses. Parent company Golfzon is best known for developing a golf simulator available in 6,200 locations across 62 countries.

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• Topics
• North Asia
• Southeast Asia
• Consumer
• Buyouts
• Japan
• MBK Partners