IPO Report: ClubCorp Holdings (MYCC)

Francis Gaskins |

Founded in 1957, ClubCorp Holdings ($MYCC) is a membership-based leisure business and a leading owner-operator of private golf, country, business, sports and alumni clubs in North America.

Nine other IPOs are scheduled for this week, 12 for next week. The full IPO calendar can be found at IPOpremium

MYCC is based in Dased in Dallas, TX, and  scheduled a $306 million IPO with a market capitalization of $1.046 billion at a price range mid-point of $17, for Friday, September 20, 2013.

MYCC's S-1 was filed September 9, 2013.  Manager, Joint Managers: Goldman; Jefferies; Citigroup; BofA Merrill Lynch.  Co-Managers: Wells Fargo / Stephens

Summary
Founded in 1957, MYCC is a membership-based leisure business and a leading owner-operator of private golf, country, business, sports and alumni clubs in North America.

Valuation

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

Proforma for 6/12/13 24 wks

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

ClubCorp Holdings

$1,046

1.5

153.8

4.2

-26.2

29%

             

Top line revenue is growing 4-5% per year. Operating income is in the 8% range, and the primary path to profitability seems to be to retire debt that has a 10% coupon.

Glossary

Conclusion
Internal growth appears limited, and MYCC has probably cherry-picked the best acquisition prospects in the US. The proposed market capitalization of $1 billion seems high based on the P/E multiple and the price-to-tangible book value, although the underlying real estate might provide an asset cushion. The rating is neutral to negative at the price range mid-point.

Business
Founded in 1957, MYCC are a membership-based leisure business and a leading owner-operator of private golf, country, business, sports and alumni clubs in North America.

The portfolio of 151 owned or operated clubs, with over 145,000 memberships, serves over 350,000 individual members.

MYCC is the largest owner of private golf and country clubs in the United States and owns the underlying real estate for 80 of 102 golf and country clubs (consisting of over 18 thousand acres of fee simple real estate).

Facilities are located in 23 states, the District of Columbia and two foreign countries.

Private equity owned
KSL owns 100% of MYCC pre-IPO
http://www.kslcapital.com/

Dividend policy
MYCCC expects to pay a quarterly cash dividend of $0.12 per share, or $0.48 per annum, starting in the first calendar quarter of 2014. At a price range mid-point of $17, $.48 per year is a 2.8% yield.

Use of Proceeds
MYCC intends on selling 10.9 million shares. A selling stockholder intends to sell 7.1 million shares.

MYCC expects to net $169 million from sale of 10.9 million shares. $145 million is allocated for debt repayment, $15 million is allocated to redemption premium, and $5 million is topay a one-time termination fee to an affiliate of KSL.

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Companies

Symbol Name Price Change % Volume
MSDI Monster Digital Inc 3.40 -0.02 -0.58 82,975
MYCC ClubCorp Holdings Inc. 14.33 -0.23 -1.58 324,265

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