July 11 (UPI) — Apollo Global Management, a private equity firm, has agreed to pay $1.1 billion for ClubCorp Holdings Inc., a leading operator of private golf and country clubs in North America.
Shareholders of ClubCorp will receive $17.12 per share in cash, a premium of about 30.7 percent over ClubCorp’s closing stock price Friday on the New York Stock Exchange. The board of directors unanimously approved the deal, the company said.
“We plan to leverage Apollo’s resources and expertise while working with ClubCorp’s dedicated team to continue to grow the business,” David Sambur, a senior partner at Apollo, said in a statement.
The companies plan to close the transition by the fourth quarter of this year.
Founded in 1957, Dallas-based ClubCorp owns or operates more than 200 private golf, country and private clubs, including the Firestone Country Club in Akron, Ohio; Mission Hills Country Club in Rancho Mirage, Calif.; The Woodlands Country Club in The Woodlands, Texas; and the Capital Club Beijing.
ClubCorp’s management has sought to sell as debt increases and membership growth lags.
In the first quarter, ClubCorp’s revenue rose 3 percent to $221.3 million and its net loss narrowed 9.7 percent to $7.5 million. Liabilities, including long-term debt, are $1.99 billion.
Shares have declined about 25 percent since reaching Feb. 21 — the day before ClubCorp reported weak fourth-quarter earnings.
After the transaction was announced, a shareholder rights law firm, Johnson & Weaver, LLP, announced it has launched an investigation into whether the board members of ClubCorp breached their fiduciary duties in connection with the proposed sale to Apollo.
“The transaction may put too small a price on the company and would result in a loss for many ClubCorp shareholders,” the law firm said in a statement.
The firm said the price is below an analyst price target of $27 per share.
Meanwhile, golf course membership has decreased — mainly among millennials.
The number of people who played golf in 2016 fell 1.2 percent from 2015 to 23.8 million, according to a National Golf Foundation report obtained by Golf Digest.
In a study of golfers 18 to 34, there were 6.4 million of them between 18 and 34 in 2015, down from nine million in the mid-1990s, according to a 2015 National Golf Foundation report. Participation rates fell to 9 percent from 14 percent for that group.
“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,” said John Beckert, ClubCorp’s chairman of the board, in a statement.
Apollo has been on a buying spree, acquiring ADT Corp., Fresh Market Inc., Diamond Resorts International Inc., Outerwall Inc. and Rackspace Hosting Inc. In May, the firm agreed to buy communications infrastructure provider West Corp. for about $5.1 billion including debt.