MBK sells Japan golf club to SoftBank's Fortress for $3.5 bn

MBK Partners has sold Japan's largest golf course operator Accordia Next Golf to SoftBank's Fortress Investment Group for 400 billion yen ($3.5 billion), according to the private equity firm on Tuesday. They signed a share purchase agreement on Nov. 15.

The exit created more than a threefold return for the North Asia-focused PE firm, the largest capital gain in Japan's M&A market so far this year.

The sale price represents over 10 times Accordia's earnings before interest, tax, depreciation and amortization (EBITDA), reflecting the strong recovery in Japan's golf club market.

The golf course operator attracted about 10 preliminary bidders last August, ranging from Japanese strategic buyers to global PE houses. They were shortlisted to Fortress, Blackstone, Macquarie and an unidentified buyer and Fortress was the highest bidder in the final bidding round. 

MBK acquired a majority stake in Accordia Next Golf for 85.3 billion yen in January 2017, jointly with a Canadian institutional investor. Accordia is among the investments made by MBK's inaugural special situations fund.

Accordia runs more than 170 golf courses in Japan, with the highest market share of 12% among the country's golf course operators. In February 2019, the PE firm bought Next Golf Management, previously known as Orix Golf Management, in an add-on acquisition

In October 2020, MBK bought the remaining stake in Accordia for 2 trillion won from a Singapore-listed real estate investment trust company. 

Accordia's EBITDA has now increased to the 400 billion won range from about 160 billion won in 2017, the year MBK acquired its majority stake.

This year, MBK has made exits in China, Japan and South Korea. Last August it sold South Korea's Doosan Machine Tools Co. to DTR Automotive for 2.4 trillion won. The exit generated an internal rate of return of over 50, its highest-ever return from an exit.

Last May, it sold Apex International Corp., China's leading airfreight company for 1.6 trillion won, which yielded a 37% IRR.

At an investor conference call in March of this year, MBK Partners founder and Chairman Michael ByungJu Kim picked Accordia Next Golf as a case of its successful add-on investment, expressing confidence about its exit plan. MBK has over $24 billion under management

Meanwhile, MBK has a 53.47% stake in South Korea's Golfzon County, which began the process to apply for an initial public offering in 2022. Analysts had said its IPO would value the country's largest golf course management company at over 1 trillion won ($836 million).

Write to Jun-ho Cha at chacha@hankyung.com
Yeonhee Kim edited this article.