Apollo sale of Invited signals stronger M&A for U.S. luxury club operators

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Apollo sale & luxury clubs M&A

Highlights

Apollo agreed to sell Invited Clubs, North America's largest private country-club operator, to KSL Capital Partners in a $3 billion deal including debt.
Invited's annual operating earnings rose to over $350 million under Apollo, with average member net worth near $3 million and initiation fees topping $100,000.
Private club M&A deal volume reached decade highs this year, driven by post-pandemic luxury demand and a 37% rise in golf course spending versus pre-pandemic levels.

Deal momentum builds in private clubs

As first reported by Reuters, Invited Clubs has agreed to be sold to KSL Capital Partners, confirming a roughly $3 billion transaction including debt for the largest private country-club operator in North America.

Invited operates more than 150 properties, including Firestone Country Club in Akron, Ohio, and TPC Craig Ranch in McKinney, Texas. Apollo bought the company, formerly known as ClubCorp, nearly a decade ago and took it private in 2017 at an enterprise value of $2.2 billion, including debt.

Daniel Cohen, a partner at Apollo, said post-COVID consumer behavior is shifting toward spending on experiences rather than goods, helping support demand for country club memberships. He said golf club membership revenue tends to be sticky, providing recurring income because members often view clubs as a central part of their social lives.

According to a source familiar with the company, Invited's annual operating earnings more than doubled to more than $350 million under Apollo's ownership, excluding divested clubs and businesses. Apollo had prepared the company for another public listing, Reuters reported in December, but continued to market the asset before reaching a deal with KSL, its previous owner from 2006 to 2013.

Affluent leisure spending supports valuations

Deal activity in golf and private membership clubs has reached its highest level in at least a decade this year, based on transaction values compiled by Reuters. The trend reflects stronger participation in golf since the pandemic and sustained demand from wealthy consumers for privacy, exclusivity and family-focused amenities.

Private-club memberships can cost tens of thousands of dollars annually, with some initiation fees reaching $100,000 or more. The average net worth across Invited's roughly 140,000 memberships is around $3 million, according to the source familiar with the company.

Other recent transactions point to the same pattern. Soho House goes private this year in a $2.7 billion deal backed by a group including MCR Hotels and Apollo, while Bain Capital bought Concert Golf for more than $1.3 billion including debt last year, and KKR is exploring a sale of The Bay Club Company, Reuters reported in May.

Golf, which had been losing popularity before the pandemic, attracts new players as a socially distanced activity and retains many of them. Bank of America aggregated debit and credit card data shows players spent 37% more at golf courses last year than the pre-pandemic average, behind only the cruise industry and ahead of theme parks and boating, reinforcing the sector's appeal to investors.

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