Troon Golf has a new financial backer. Kohlberg & Company, a private equity firm, has acquired a majority of the company’s stock, replacing Starwood Capital and Goldman Sachs as majority shareholders.
Greg Norman’s organization, Great White Shark Enterprises, is an investor in Kohlberg & Company and Norman, along with principals of Kohlberg & Company, will join the Troon board of directors.
Dana Garmany, who founded Troon in 1990, will continue to lead the company as its chairman and CEO.
“The team is really happy about this,” Garmany said. “We went through a competitive process to find the right group. They are a financial investor. They do these things through their fund in order to make money and that fits perfectly with what we want to do.”
Garmany said he expects Kohlberg to stay invested in the company for the next five to seven years, a much shorter time span that the prior financial backers. Starwood invested into Troon in 1996 and Goldman Sachs in 1999. Goldman had divested all other properties in its fund, except for Troon, and was looking for an exit.
“[Goldman] would have left in 2006 or 2007, but then the crash came,” Garmany said. “This investment was doing well, but was the only thing left in their fund.”
Troon dropped to around 170 courses in late 2008, as new developments dried up across the globe. But the company has steadily grown since then, primarily by adding private clubs. It currently operates 207 18-hole equivalent courses.
Garmany said he originally looked for an investor to just replace Goldman Sachs. But in October he started looking for a fund to replace both Goldman and Starwood.
Garmany said he and other senior management have about he same percent of ownership as they did when Goldman and Starwood were the primary investors.
Jerome Kohlberg, who had been a founding partner in Kohlberg Kravis Roberts, founded Kohlberg & Company in 1987. The company focuses on middle market investments where it can work with senior management to grow the business.
Garmany said most growth would likely be through private clubs. Roughly one-third of its portfolio are private clubs.
“We may look at consolidation of small companies,” Garmany said. “[But] We don’t plan to acquire assets. We will stay a management platform.”
Garmany said Kohlberg’s short-term investment matches his timeframe — allowing the company to grow fast, with the possibility that he will then step aside.
Garmany, who previously battled cancer, stepped down as CEO in 2010, only to resume the position a year later when his replacement, Hud Hinton, did not work out.