Apollo Lines Up $1.1 Billion Investment In Struggling Golf Industry

Apollo Global Management has become the latest private equity firm to bet big on golf.

In its latest take-private deal, Leon Black’s buyout giant has agreed to acquire golf & country club operator ClubCorp (NYSE: MYCC) for $17.12 per share in cash, or about $1.1 billion. The deal represents an approximately 31% premium to the company’s closing stock price Friday. The deal is expected to close before the end of the year.

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Based in Dallas, ClubCorp operates more than 200 golf and sports clubs, including Firestone Country Club in Akron, OH, Mission Hills Country Club in Rancho Mirage, CA, and The Woodlands Country Club in Woodlands, TX.

The golf industry has struggled in recent years, though, with Bloomberg reporting a decline in participation after it reached peak popularity in 2003. But PE firms haven’t been deterred from investing in a game that has a devoted, affluent following.

In May, New York-based KPS Capital Partners agreed to acquire golf club and apparel manufacturer TaylorMade Golf from adidas (FRA: ADS) for $425 million. And in February, Providence Equity Partners took a minority stake in Topgolf Entertainment, operator of the popular hybrid driving range/entertainment venues popping up around the world. Even ClubCorp has a history of PE ownership; KSL Capital originally acquired the company for $1.8 billion in 2006, then took it public in 2013.

The latest golf deal continues a spate of take-private acquisitions for Apollo. Since the start of 2016, the PE firm has completed seven such transactions, more than any other US-based PE investor, according to the PitchBook Platform. And once Apollo's latest blockbuster deal—its agreement to buy communications infrastructure company West for $5.1 billion, including debt—is completed, the PE firm will have one more take-private deal under its belt.

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Article by Adam Lewis, PitchBook