The Pellucid Perspective - December 2014 - (Page 5)

GOLF COURSE TRANSACTIONS Troon strengthens Southeast presence with Honours Golf acquisition By Jim Dunlap W hen private equity firm Kohlberg & Company bought out Goldman Sachs and Starwood Capital as the primary financial backers of Troon Golf early this summer, Troon CEO Dana Garmany said that the fresh infusion of growth-oriented capital would fuel some new Troon growth initiatives. Early this month, the first of those came to pass when Troon acquired Birmingham, Ala.-based industry player Honours Golf and their 16 course management portfolio. The acquisition dramatically increased Troon's operating presence in the Southeastern U.S., where Honours manages courses in Florida, Alabama, Mississippi and North Carolina, and increased Troon's industry-leading worldwide portfolio of managed courses to more than 250. Honours was owned by industry veterans Bob Barrett and Rob Shults, who co-founded the company in 1998, and Bob Julian. Barrett, Honours CEO, will continue to oversee the Honours brand for Troon on an employment contract, while Shults will go his own way and devote his time to his role as coowner with Barrett of two courses at World Golf Village in St. Augustine, Fla., 27 holes at Peninsula Golf & Racquet Club in Gulf Shores, Ala. and Rock Creek Golf Club in Fairhope, Ala. as well as his real estate interests. Asked why now, and why Troon, Shults said, "It was right on a couple of different levels. Troon reached out to us in the shadows of their acquisition (by Kohlberg) in June, and we liked what they were going to do with it. We've had nothing but good relations with Troon, and it was a good chance to realize the full value for the company. We were approached twice by other people in the last 10 months and said no, but this time the stars just aligned. I don't think there's anyone else we would have done this with." As to why he did not follow Bartlett to Troon, Shults said, "Basically, I like to be my own boss. Troon and Honours are focused on third party management, and that's not really my end of the business. I've been more involved in the ownership and business development side, and I'm looking forward to doing more of that." Garmany said that the deal made sense on a number of levels for Troon, who will retain the Honours brand as yet another entree on the Troon Golf menu of course management offerings, joining the company's Prive private club division and perhaps some others to come. "We'll sell [Honours] as a different kind of offering," Garmany said. "It gives us the ability to offer something a little different, and gives us a little better band width within the industry, similar to what some major hotel chains have done. We want to make sure we can go after a large number of targets with a lot of different offerings, from full management to maintenance only, etc. We'll continue to look at things that are working for us." While both Garmany and Shults acknowledged the recent influx of investment capital into the industry on the asset side, and there are almost certainly some more substantial consolidation and acquisition moves in the near future, Garmany said Troon's chips will continue to go into the management side of the golf pot. "The ownership side of golf is not healthy, as a whole," he said. "We look at two things that are affecting the stuff that's in play. One is devaluation of courses, which we don't see as a positive thing for ownership, and the other is that regardless of how courses are doing, somebody has to run them, so we like n that side better." "We want to make sure we can go after a large number of targets with a lot of different offerings, from full management to maintenance only, etc. We'll continue to look at things that are working for us." DANA GARMANY CEO, TROON WWW.PELLUCIDCORP.COM THE PELLUCID PERSPECTIVE 5 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - December 2014

TOC
The Northern Golf Alliance – A new challenge to the NGCOA?
Troon strengthens Southeast presence with Honours Golf acquisition
2014 in review: where is the hope?
A new day indeed, or in Breed, for Independence
New payment processing technology offers challenges and opportunities for courses
November golf weather impact: A parting shot from Mother Nature
Orlando operators need some magic to be in the black
Tucson muni courses struggling despite turnover to private management
Tiger: balm, or bomb

The Pellucid Perspective - December 2014