LDC exits investment in American Golf

20 Dec '11

3 min read

Lloyds TSB Development Capital, (LDC) the leading mid-market private equity investor, has reached an agreement to sell its majority shareholding in Europe's largest golfing retailer, American Golf, to an affiliate of Sun European Partners, LLP, (Sun European Partners), the European adviser to Sun Capital Partners, Inc.

American Golf is Europe's leading multi-channel specialist retailer of golf equipment and accessories, with a portfolio of 88 stores across the UK and Northern Ireland and a major online presence.

It prides itself on offering unrivalled value on the broadest product range of clubs, bags, balls, clothing and accessories from the major golf brands, including Callaway, TaylorMade, Titleist, Ping, Wilson, Mizuno, Powakaddy, Motocaddy, Nike and adidas.

Last year, the retailer increased total sales by 20% to £86.6m, driven by the acceleration of its store rollout and refit programme and strong growth in its internet business. Like for like sales in the current financial year ending January 2012 have continued to rise, while the number of customers in its membership club has grown to 800,000.

Lloyds TSB Development Capital, (LDC) originally backed the management buyout of American Golf in 2004, investing for a majority shareholding. Since then, the number of stores has increased from 50 to 88.

In March 2010, the business also acquired SW Golf Limited, the operator of the onlinegolf.co.uk brand, which has driven internet sales to 15% of total revenues. Sales to overseas markets represent over 30% of online sales. Profits at American Golf have increased 250% since 2010.

Chris Hurley, UK Portfolio Managing Director at LDC, said: “American Golf has made excellent progress with its growth strategy against one of the most challenging retail climates for several years, thanks to a clear proposition, highly capable management team, first-class store execution and growing online platform. "

"Under the leadership of Nick Wood, the business has accelerated both revenue and profits growth significantly over the last four years, and is now well placed to continue driving market share. We wish the business every success for the future.”

Nick Wood, CEO of American Golf, said: “LDC has been a hugely supportive, long-term investment partner over the last eight years. Its commitment has enabled us to build a market leading business with a highly scalable platform for growth.

“This is an exciting time for everyone at the business as it embarks on its next phase of growth. Sun's experience and sector knowledge will be extremely valuable in driving our expansion into 2012 and beyond.”

Philippe Neuschaefer, Vice President at Sun European Partners, said: “American Golf is a niche retailer with an exciting product portfolio. The company is performing well and with our extensive experience in the retail sector, American Golf represents a significant opportunity for sustainable growth. We look forward to working with the management team and to continuing to develop the business.”

The transaction is subject to approval from regulatory bodies and will complete 30 days following the agreement.

A team from Rothschild, led by Andrew Thomas, advised the shareholders.

Lloyds Development Capital (LDC)

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