With hiring, new funding, Meadowbrook looks to double size

Golf Course News, Nov 2002 by Rice, Derek

CHAMPIONSGATE, Fla.-With the addition of industry veteran Don Rhodes as its vice president of acquisitions and development, coupled with the formation, along with Apollo Real Estate, of Honors Fund LLC, Meadowbrook Golf appears poised to take the next step toward becoming a larger player in the course management sector.

Rhodes, who formerly held highprofile positions at Heritage Golf, Bank of America and Textron Financial, said the company, backed by Apollo is looking make significant acquisitions.

"Apollo has made the decision, and I think they're great for doing it, that instead of trying to sell everything and getting out even or with a small profit maybe, or a loss, they've raised more money and they're going to try to roughly double the size of the company," he said.

Because Apollo went through the boom of the 1990s and the downturn of the early 21st century, Rhodes said, the company is in a position to understand that golf is a stable business, just not one that was made for getrich-quick schemes.

"They've been through this and they understand the reality of the market. They understand what golf as a business can really generate. It is a business that generates without leverage, maybe low teens numbers," Rhodes said. "It's a stable business during downturns, but you have to buy right. I think now is the time to buy, and that's what they think. They're putting more money in, so it's a great opportunity."

Rhodes said he left Heritage because he felt the company wasn't growing at the rate he expected when he came on board.

"I was supposed to do the financing for all the acquisitions and do acquisitions on the East Coast. But we did one acquisition in almost two years (Valencia CC, GCN May 2002)," he said. Shortly after Rhodes' departure, Heritage acquired Weston Hills (see story above).

At Meadowbrook, Rhodes will be responsible for overseeing the company's new Honors Fund, which was established shortly before his arrival to capitalize on acquisition opportunities, participate in corporate restructurings and optimize the performance of assets held in the fund.

The fund will initially be capitalized by an equity investment of $25 million from Meadowbrook and Apollo, and will also target thirdparty investors for an additional $125 million contribution. By leveraging this fund, the company will be able to acquire between $300 million and $350 million in golf course assets.