McConnell Golf has completed its second acquisition in less than a week with its purchase of the Reserve Golf Club of Pawleys Island on the South Carolina coast.
The deal gives the company founded by serial entrepreneur John McConnell six courses in the Carolinas, including the Raleigh Country Club and Durham's Treyburn Country Club. It also demonstrates McConnell Golf isn't taking its eye off its core business following last week's diversification into a new realm - selling software that private golf clubs use to run their operations - with its purchase of ClubSoft, a Kansas company whose revenue approached $2 million last year.
Reserve, which was owned by members, filed for Chapter 11 bankruptcy in December. A federal bankruptcy judge in Columbia, S.C., approved the sale to McConnell Golf on Tuesday.
Ray McDonald, vice president of sales and marketing at McConnell Golf, said Reserve's more than 300 active members weren't able to invest in needed upgrades. "We're committed to making the capital improvements they weren't able to make," he said.
The financial stability that McConnell Golf brings to Reserve should help it attract new members, McDonald said. A bonus is that McConnell Golf allows members who pay the initiation fee at any one of its clubs to play all of its courses. McConnell Golf will handle all of the Reserve's back-office operations, such as accounting, from Raleigh, McDonald said.
McConnell Golf has experience turning around the operations of a struggling club. Its network began in 2003 when John McConnell acquired the Raleigh Country Club after it filed for bankruptcy.
McConnell Golf is paying $522,075 for the 325-acre Reserve property, which includes a course designed by Greg Norman, and has committed to spend an additional $2 million over the next four years on the country club. That money is for, among other things, renovation and construction and funding "negative cash flow from club operations," according to court documents.
The property's value is listed at nearly $1.2 million in court documents.
McDonald said McConnell Golf isn't finished buying private golf clubs. "If it's in the right location, and the right kind of golf course, we are looking," he said.
John McConnell is the co-founder and former CEO of publicly traded Medic Computer, and the sale of that business for $923 million made him more than $60 million. He then invested in and became CEO of A4 Health Systems, which was sold in 2006 for $272 million.
At the same time, his passion for golf led him into his second career.
