Through the all-stock deal with the private-equity firm, which is expected to close in the fourth quarter of this year, shareholders will receive $17.12 per share in cash, a premium of about 30.7% over the management firm’s closing stock price on July 7. The deal has an enterprise value of $2.2 billion. “With the support of the Apollo funds, we are confident that ClubCorp will be able to continue building on its success,” said Chairman John Beckert.
ClubCorp, the Dallas, Texas-based operator of golf and country clubs, agreed on July 9 to be acquired by private-equity firm Apollo Global Management for about $1.1 billion in equity value, and an enterprise value of $2.2 billion, including the assumption of debt, USA Today reported.
In the all-stock deal, shareholders of ClubCorp will receive $17.12 per share in cash, a premium of about 30.7% over ClubCorp’s closing stock price on July 7.
Founded in 1957, ClubCorp owns or operates more than 200 golf and country clubs and sports clubs, attended by 430,000 members, USA Today reported. Some of its most prominent properties include Firestone Country Club in Akron, Ohio; Mission Hills Country Club in Rancho Mirage, Calif.; The Woodlands Country Club in The Woodlands, Texas; and Metropolitan Club Chicago.
The deal is expected to close in the fourth quarter of this year. After the deal is completed, ClubCorp shares will be delisted from the New York Stock Exchange, USA Today reported.
ClubCorp also plans to issue a one-time quarterly dividend of 13 cents per share, to be paid on July 28.
“We are pleased to reach this agreement with the Apollo funds, which follows a comprehensive review of strategic alternatives by ClubCorp’s Board of Directors,” said John Beckert, Chairman of the Board of ClubCorp. “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 unrivalled experiences at its clubs.
“This transaction represents the culmination of our review of strategic alternatives and achieves our goal of enhancing value for shareholders. The company looks forward to working closely with Apollo as it enters the next stage of its growth,” Beckert added.
“We are excited for our funds to be acquiring ClubCorp,” said David Sambur, Senior Partner at Apollo. “We look forward to working with ClubCorp’s outstanding management team and talented employees, who have built a best-in-class member-centric business that delivers exceptional experiences. We plan to leverage Apollo’s resources and expertise while working with ClubCorp’s dedicated team to continue to grow the business and provide the highest level of service and club offerings to members.”
The deal for ClubCorp is the latest in a string of take-private transactions for New York-based Apollo, which deployed more money last year than ever in its history, Bloomberg reported, as it scooped up public companies including ADT Corp., Fresh Market Inc., Diamond Resorts International Inc., Outerwall Inc. and Rackspace Hosting Inc.
In May of this year, the firm agreed to buy communications infrastructure provider West Corp. for about $5.1 billion including debt, Bloomberg reported, and earlier in July, it completed its acquisition of Lumileds, the lighting-components division it carved out of Royal Philips NV.
To replenish its coffers, the firm has set a $23.5 billion cap on its new global buyout fund, Bloomberg reported. The pool, the firm’s ninth, will be the largest ever raised by a private-equity firm if it exceeds the $21.7 billion that Blackstone Group LP gathered for its fifth pool from 2005 to 2007.
Apollo, led by founders Leon Black, Josh Harris and Marc Rowan, oversaw $197.5 billion in private equity holdings, credit assets and real estate as of March 31, Bloomberg reported.
The announcement of the deal comes three months after ClubCorp announced the retirement of its CEO, Eric Affeldt, and said it had decided not to pursue a “strategic transaction,” after efforts to explore a sale did not result in any offer for the entire company, CNN/Reuters reported. However, the company had kept the strategic review committee of its Board of Directors in place.
In May, ClubCorp reached a settlement with activist investor FrontFour Capital Group to add two independent directors to its board. FrontFour had called for exploring several options, including a sale, CNN/Reuters reported.
KSL Capital, another private equity firm, acquired ClubCorp for $1.8 billion in October 2006 and took it public in 2013.
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