이 기사는 2020년 05월 25일 08:00 thebell 에 표출된 기사입니다.

South Korea’s Golfzon County has been growing rapidly for the last two years on the back of North Asia private equity firm MBK Partners’ funding capabilities and operational skills.

With its ambition of leading the realignment of the Korean golf industry in a partnership with Golfzon Newdin Holdings, MBK Partners bought in 2018 roughly 50 percent of Golfzon Country, the golf course operator separated from the conglomerate, for 114 billion won ($92.6 million) in a private placement. In the following year, the firm injected additional funds, bringing its total capital invested in Golfzon County to 184 billion won.

Continuous investment in the golf company by MBK Partners was widely expected as the firm partnered with Golfzon Newdin in an attempt to apply a successful example of the consolidation of the Japanese golf industry to Korea. In Japan, Goldman Sachs bought golf course businesses that went bankrupt after a sharp economic downturn in the 1990s before setting up Accordia Golf in the early 2000s.

Nonetheless, what MBK Partners is pursuing is not just to consolidate the Korean golf industry. Its eventual goal is to create a new market in the country with the golf course chain business. To that end it is a prerequisite that Golfzon County should achieve an economy of scale by buying more peer companies.

Accordia Golf holds approximately 5 percent market share in Japan. If this can be used as a reference, Golfzon County needs to expand its business to run roughly 30 of the country’s more than 550 golf courses based on data as of 2017.

At the end of May in 2020, Golfzon County is running 19 golf courses with total holes of 387, up from six golf courses with total holes of 117 in February of 2018. The number of guests visiting the company’s golf courses also tripled to 1.36 million in 2019 from 0.43 million in 2017. 14 golf courses are operated directly by Golfzon County, with the remaining five leased for operation.

Golf County has seen a significant increase in its profitability. Its revenue increased 101 percent year-on-year to 135.5 billion won in 2019. Operating income jumped 240 percent to 38.2 billion won and earnings before interest, taxation, depreciation and amortization (EBITDA) were 57.4 billion won, leading to operating income margin of 28 percent and EBITDA margin of 42 percent. This rapid growth is expected to continue for a while as the company appears to continue its acquisition activity.

In its investment in Golfzon County, MBK Partners has focused on one thing: growth by continued acquisitions and operational improvement. This was beyond typical strategies such as improving management efficiency and required a fundamental change in attitude of both management and employees of the company.

Thus MBK Partners has put in an effort to change the company’s culture to prioritize long-term opportunities and embrace failures. It worked together with existing management and shareholders on establishing the company’s mid to long-term goals even before deploying capital to the company. Any decisions on acquisitions are also jointly made.

(Reporting by Hee-yeon Han)