Notching its third investment before holding a final close, IMG/Chase Sports Capital, the $200 million private equity fund created by Chase Capital Partners and sports management company International Management Group (IMG), last month acquired The Golf Warehouse, an on-line retailer of golf products.
New York-based Sports Capital Partners, which manages the fund, gained a 72% stake in Wichita, Kan.-based The Golf Warehouse, while the company’s three founders, Mark, Michael and Richard Marney, retained a 28% stake. Sports Capital Partners’ Managing Partner David Moross declined to disclose the transaction price, but said his firm’s multi-million dollar investment was made with all equity.
Golf product sales is a $5 billion dollar industry, according to Moross, with only a fraction of sales coming from the Internet.
Michael Marney, president of The Golf Warehouse, said he and his brothers sold the majority stake because they had taken the company as far as they could with their own money and needed capital to continue to grow the business. Marney said the company will use the capital to add management and increase advertising.
The Golf Warehouse has more than 10,000 golf-related products available online and has direct account status with suppliers including Titleist, Ping and Nike. The company anticipates $6 million in 1999 sales and employs approximately 80 people.
Although IMG/Sports Capital was not established to focus on Internet companies, two of its first three deals have been e-commerce companies. “You can’t be an investor and not look at the myriad of Internet companies out there as potential investments,” Moross said.
Sports Capital Partners acquired Skip Barber Racing School in the first quarter (BUYOUTS March 8, p. 10) and in April participated in a $30 million round of financing for Tickets.com. Since its launch last year (BUYOUTS April 6, 1998, p. 8), Sports Capital Partners has raised $170 million for its debut fund and anticipates a final close Dec. 15 on an undisclosed amount that is likely to exceed the $200 million target, Moross said.