BUSINESSMAN NIALL McFadden has completed an £85.5 million (€108.25 million) refinancing of Club Company Holdings, the British country club operator that his private equity firm Boundary Capital acquired in 2006 with a group of private clients and Anglo Irish Private Banking.
The refinancing with Anglo Irish Bank provides £12 million in new banking facilities, which will be used to upgrade the company’s network of 11 country clubs in England and fund a £6.6 million distribution to shareholders.
Boundary led the £96 million buyout of the business in June 2006, using debt and equity bridging finance. The firm subsequently raised £33 million of equity from private clients.
While Boundary owns about 10 per cent of the company, the division of the shareholdings held by its private clients and Anglo Irish Private Banking was not disclosed.
The distribution is being executed by way of a share buyback in which Club Company will buy and cancel 13.33 per cent of all its ordinary shares in return for payment of 20 per cent of shareholders’ original equity investment. The interest of investors has not been diluted as a result of this equity release process.
As part of the transaction, Club Company is demerging its property assets from its operating business. Both units will be held within Club Company Holdings Ltd, the vehicle in which investors hold shares in the business.
“This split will make the company more marketable in the future; widening the base of potential buyers for the property assets and increasing the number of potential trade buyers for the operating company,” said a letter in which investors were informed of the equity release and refinancing.
The letter also said Club Company’s trading performance in the six months to March, the first half of its fiscal year, was in line with budget and 17.5 per cent ahead of the previous period. Earnings before interest, tax, depreciation and amortisation (ebitda) rose to £3.29 million in the period from £2.89 million in the same period a year ago, while revenues rose to £15.71 million from £14.68 million.
“The results for the first half of the year include just three full months of trading of the new health and fitness club in Lichfield and do not reflect membership price increases which impact fully in the second half of the financial year to September 2008,” the letter said.
“The second half of the year also includes the summer months which are the strongest performance months in the year due primarily to the uplift in golf activity.
“The second half of the year will therefore finish ahead of the first six months and management are confident of meeting the full-year budgeted ebitda of £9.3 million.”
