Century Golf Partners has taken over American Golf and its 92 golf courses under an unusual arrangement that leaves American Golf as a stand-alone company.
Jim Hinckley, CEO of Century Golf Partners, is now also CEO of American Golf. Century Golf, the world’s 9th largest management company, will also provide consulting services to American Golf.
American Golf is the 8th largest management company in the world, but less than half its former size. It had 294.5 courses at its height in 2001. Goldman Sachs acquired it in 2002 and began paring down its portfolio under the direction of Paul Major. American Golf owns 27 golf courses, leases 54, and manages 11.
Newcastle Investments, which is managed by Fortress Investments Group, made a $110 million investment into American Golf in 2006. In December, it restructured the company’s debt, funding $54.5 million of its $109 million debt. It also acquired the equity of American Golf and a ground lease for $2.5 million. Major decided earlier in the year that be wanted to leave American Golf after he had completed the recapitalization of the company, and Newcastle recognized it had no experience running golf courses. As such, Newcastle approached Hinckley about running the company and created a strategic vision and plan.
American Golf ‘s stronghold is California. Century Golf only has only three facilities and five 18-hole equivalents in the Golden state. It has 83 courses overall. That seems to suggest that the same CEO, Hinckley, can run both companies without significant conflict.
Hinckley left ClubCorp in 2002, where he had served as president. He founded Century Golf in 2005 and it acquired the Arnold Palmer Golf Management brand. It owns courses and operates as a third-party manager.