The Pellucid Perspective - August 2015 - (Page 5)

golf courSe SaleS Rise of Arcis Golf contributes to record high in industry consolidation By Jim Dunlap S everal months after the relatively quiet purchase of controlling interest in Dallas-based Eagle Golf Management, the Arcis Equity Partners private equity firm announced last month the formation of Arcis Golf to operate what is now a portfolio of 72 owned or managed courses throughout the U.S. The Arcis portfolio consists of 54 owned courses and clubs and another 18 managed properties which have been mostly divided into either Castlegate or Ironbridge branded properties, with most of the group's private clubs and high end public facilities designated as Castlegate properties and the remaining midlevel daily fee and municipal courses being Ironbridge facilities. Arcis Golf, also based in Dallas, is headed by industry veteran Blake Walker as its CEO and Managing Partner, with former Eagle Golf CEO Joe Munsch as President. The acquisition of the former Eagle properties, along with last year's roughly $320 million purchase of 48 courses owned by CNL Lifestyle Properties and selected other small portfolio and individual property buys has catapulted Arcis Golf into either the 5th or 6th largest position in the U.S. in terms of course operations, depending on whether Century Golf Partners' total has fluctuated by a course or two recently. More significantly, it is further indication that consolidation within the facility ownership and management aspect of the U.S. golf industry is at, if not an all-time high, certainly a peak since the turn of the century. Steven Ekovich of the Marcus & Millichap course property brokerage firm estimates that between 20 and 21 percent of all U.S. courses are now professionally owned or managed, a figure which may be a trifle high when all golf facilities are included, but nevertheless likely represents an all-time aggregate total. Walker, one of the industry's many ClubCorp alumni and a former aggregator who assembled the Pegasus portfolio for investors, agrees that industry consolidation has reached unprecedented levels, saying "It's clearly at an all-time high. We're at a point in the industry where a fee simple portfolio can make money for its investors." With ClubCorp continuing to add to its total of nearly 200 owned or managed clubs and courses, along with industry leader Troon Golf, fellow members of the triple digit management club Billy Casper Golf and KemperSports and a host of smaller but mostly growing course management companies, the consolidation trend is almost certain to continue. A number of factors have contributed to that trend, from an improving economy that has slightly buoyed hope that golf spend may increase, to the realization by many current individual owner/operators that they don't have the purchasing power, expertise, economies of scale, etc. to compete in today's industry, to the availability of www.PellucidCorp.com Walker "It's clearly at an all-time high. We're at a point in the industry where a fee simple portfolio can make money for its investors." Blake Walker Ceo, arCis Golf investment capital and what is apparently an improving perception of golf as an asset class for investors. What about my course? While course properties that are well located in terms of population density, median family income and golf supply will The Pellucid PersPecTive 5 http://www.PellucidcorP.com

Table of Contents for the Digital Edition of The Pellucid Perspective - August 2015

TOC
TaylorMade: The Golf Gods giveth and taketh away
Rise of Arcis Golf contributes to record high in industry consolidation
Teeing up some competition – PGA Tour and EZLinks Golf
One year later, Goat Hill on the road to recovery
Good customer service and communication two keys to success
July golf weather impact: A small step backwards
New York, New York – Play it again
Fathers and sons

The Pellucid Perspective - August 2015