MBK Partners puts Korea’s largest golf course operator on market

The PE giant aims for $1.5 billion through the Golfzon County sale; it canceled plans to list the firm amid tepid investor market

Golfzon County Cheongtong, a golf course in Yeongcheon, North Gyeongsang Province (Courtesy of Glofzon County)

Jun-Ho Cha 1

2023-05-23 21:26:58 chacha@hankyung.com

Mergers & Acquisitions

North Asia-focused private equity firm MBK Partners has put Golfzon County Co., the biggest golf course operator in South Korea, on sale at an estimated price of 2 trillion won ($1.5 billion), investment banking sources said on Tuesday.

MBK, one of the largest PE firms in Asia, has tapped Morgan Stanley as the lead manager for the deal. Some companies running similar businesses and investment firms are said to be potential buyers, according to sources.

MBK holds 54.8% of common stocks and 3.5% of convertible preferred shares in the golf course management firm through its special purpose vehicle. Kosdaq-listed Golfzon Newdin Holdings Co., which spun off Golfzon County in 2018, owns the remaining shares.

The PE firm bought a 50% stake in Golfzon County at 114 billion won when the golf course operator was established in 2018 and has invested a total of 288 billion won in four rights offerings since then.

MBK has acquired nine golf courses in the country, such as Lakehills Suncheon, Sunsan Country Club and Sacheon Country Club, at hugely discounted prices since 2018. The PE firm’s golf course operator has become the top player in the domestic market, running 18 golf courses.

Golfzon County posted 309.7 billion won in revenue on a consolidated basis last year, with 127.7 billion won in operating profits and 173.6 billion won in earnings before interest, taxes, depreciation and amortization (EBITDA).

MBK attempted to list Golfzon County last year as the PE firm and Golfzon Newdin agreed to exit from the company via IPO by May 2023. In April 2022, MBK filed its application for a preliminary review of an initial public offering plan to Korea Exchange and received approval in four months.

But it has delayed the listing process amid lukewarm investor interest, and the validity for the preliminary review expired in February of this year.

Similar to the possible sale, MBK has sold Japan’s largest golf course operator Accordia Next Golf to SoftBank's Fortress Investment Group for 400 billion yen ($2.9 billion) in 2021. MBK acquired a majority stake in the golf course manager for 85.3 billion yen in January 2017, jointly with a Canadian institutional investor.

Write to Jun-Ho Cha at chacha@hankyung.com

Jihyun Kim edited this article.