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PostPosted: Wed Feb 29, 2012 10:17 am 
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Location: Morgantown, WV
Not sure if I'm thrilled about this merger. I'm afraid it's just going to create higher green fees.

Scott
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Posted on Tue, Feb. 28, 2012
Golf management goliath created by merger tees off Thursday
Strand’s two largest golf companies combining
By Alan Blondin
ablondin@thesunnews.com

The merger of the two largest golf course ownership and management companies on the Grand Strand takes effect Thursday, when the combination of Myrtle Beach National Co., and Burroughs & Chapin Golf Management begins doing business as National Golf Management.

The new company is one of the 15 largest course management companies in the nation with 23 combined courses, and dwarfs competitors in the Myrtle Beach market.

“We are setting out to become an industry leading company,” said company president Bob Mauragas, who held the same position with Myrtle Beach National. “… I think we’re all very interested in being one of the top profitable golf management companies in the country.”

Maraugus said the combined companies generated $33.7 million in total revenue in 2011 and the new company will have more than 700 employees during peak golf months, though many will be part-time. Six employees of the merging companies are losing their jobs, for a net loss of three employees, according to Mauragas.

A press conference to formally announce the new company is scheduled for 11 a.m. Friday at Pine Lakes Country Club.

The merger comes approximately seven months after the two companies signed a letter of intent to unite.

“It’s difficult when you take two successful and prideful companies … and you’ve got to sit down and join arms and find out how do you merge those two?” Mauragas said. “Now the real work gets started, the work of creating one voice, one actionable service plan.”

The merger accounts for 23 of the approximate 90 public courses spanning the coastline from Andrews to Southport, N.C.. It includes 10 courses owned by MBN and five owned by B&C, and another eight courses managed by the two companies.

MBN owns and operates Aberdeen Country Club, Litchfield Country Club, Long Bay Club, Pawleys Plantation, River Club, Waterway Hills Golf Club, Willbrook Plantation, and three courses at Myrtle Beach National Golf Club. It also manages Blackmoor Golf Club, Tradition Club, Wild Wing Plantation and Wachesaw Plantation East. Three of MBN’s courses feature 27 holes.

B&C owns and operates Pine Lakes Country Club, Arcadian Shores Golf Club, the Grande Dunes Resort Course and two courses at Myrtlewood Golf Club, and manages Tidewater Plantation and Golf, River Hills Golf and Country Club, Farmstead Golf Links and Meadowlands Golf Club.

The merger does not include the private Members Club at Grande Dunes, which will continue to be owned and operated by B&C. National Golf Management will be driven primarily by former MBN executives and new employees. Mauragas is the president, MBN’s Jim Woodring is executive vice president overseeing marketing, MBN’s Max Morgan is the vice president overseeing agronomy, and B&C’s Mike Turrise is the human resources director.

Scott Justman is being hired as vice president of golf operations from Reynolds Plantation outside Greensboro, Ga., where he worked for Mauragas for seven years, and final interviews are being conducted for a corporate controller.

“I think that comes from the scalability of merging the two properties,” Mauragas said. “We own 10 properties, they own five. Myrtle Beach National’s core of competency and focus on its business has been golf for 40 years. Burroughs & Chapin has been a longstanding 100-year-plus company that has been focusing its energies on land holdings and opportunities in South Carolina. … Yes Burroughs & Chapin was involved in golf early in this town, but not nearly at the magnitude Myrtle Beach National was.”

Among the six employees not retained in the merger are B&C director of golf operations Archie Lemon, B&C executive vice president of championship golf Bob Swezey, who will remain for a 30-day transition period, and Alicia Harper, B&C’s marketing director who handled golf and other properties. “Most of [the layoffs] come from some overlap in the senior teams,” Mauragas said.

Mauragas is himself a new employee of sorts for the company, according to MBN chief executive officer Matthew Brittain, since he was hired to lead MBN into the merger.

Mauragas has been in the golf industry nearly three decades and was hired in late May away from his position as vice president of golf operations at the six-course, mostly private Reynolds Plantation.

“We were in negotiations with B&C, and our purpose in jumping to Bob was with this merger in mind,” said Brittain, who will not hold an executive position with the new company but will be on its eight-person board of directors along with B&C CEO Jim Apple.

Brittain has been the CEO for the past decade of the company that his family founded in 1971, but will turn his focus to the family’s resort and hotel holdings.

According to a Golf Inc. magazine study of golf course management companies last year, the new company will be positioned at No. 15 nationally and No. 19 internationally.

The other top-15 U.S. companies in the market are No. 9 Arnold Palmer Golf Management, which owns and operates five former Legends Group courses, and No. 1 Troon Golf, which operates four private and semi-private courses at St. James Plantation in Southport.

The merger includes courses up and down the Strand. MBN’s courses are generally located on the north and south ends, while B&C’s holdings are concentrated on the central and north areas, though only two courses in the merger reach North Carolina.

“From a marketing standpoint it filled some of our holes and gave us a complete stable we can offer to the golfer,” Brittain said.

Mauragas said the company will be looking to expand east of the Mississippi River. “It will be my goal to strategically look for – whether it be in Myrtle Beach, South Carolina or neighboring areas – opportunities where we can use our expertise to help facilities manage their bottom line,” he said. “I wouldn’t say it’s a rapid growth, but it’s part of the business plan going forward.”

“… It’s unfortunately a declining market of golf. People are struggling out there and we think we can bring a very succinct set of skills to help them.”

Though there are no private clubs in its current portfolio, Mauragas said the company is open to operating them.

Only golf courses are involved in the merger, but MBN and B&C are both involved in separate lodging and golf package businesses, so the new company will have the ability to wield power throughout a changing golf market.

The market has shifted in recent years toward consolidation and lower green fees.

Courses have increasingly joined management companies as package rounds have been tougher to come by, and courses have dropped rates nearly across the board since Arnold Palmer Golf Management entered the market in the summer of 2008 and greatly reduced its layouts’ fees.

Mauragas suggested National Golf Management won’t attempt to be a local bully. “Are we so arrogant as to think we can set price? We don’t have that attitude,” Mauragas said. “From Day 1 when [MBN and B&C Golf Management] started their business it has all been about Myrtle Beach getting better. We don’t think price wars or low-balling price is going to help Myrtle Beach in any way. I think we’re going to continue to find a way to stabilize pricing in a declining market.”

Merging its golf management division continues B&C’s focus away from operating businesses. In the past few years the company closed the Pavilion amusement park and sold attractions including water parks and go-cart tracks, and earlier this month it sold the Marina Inn at Grande Dunes.

“We’ll probably operate fewer businesses going forward as we try to sharpen our business focus,” Apple said. “I think we’re going to be more heavily weighted toward income-producing real estate investments.”


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PostPosted: Wed Feb 29, 2012 1:02 pm 
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It will be interesting to see what the future holds, MBN did not give discounts that were of substance, as they wanted everyone to buy their MBN golf passport and B&C did give Locals a generous discount.

B&C plans to book more tee times due to the merger, remember MBN owns many very large resorts along the beach and B&C is not in the hotel/resort business, although they did dabble in it and now are completely removed from it.


Gary


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PostPosted: Wed Feb 29, 2012 7:48 pm 
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I hope it doesn't raise prices. I personally think that many MB courses are overpriced right now. The lower tier of courses in the MB ask similar or higher prices than really nice courses in the area that I live. Some courses in the area that are worth about $20-25 max want around $40-$50 to play a.m summer golf. Most of them have greens that are pretty much fried that time of year, yet their prices don't reflect it. NO wonder most of them are pretty much empty when we go play. Don't know how much higher they can go.


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PostPosted: Thu Mar 01, 2012 10:55 am 
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MBKY, I think you said in a post you were getting the book this year, there are 23 golf courses with very good rates, you can play Azalea Sands, Beechwood, Brunswick, Carolina Shores, indigo Creek, River Oaks, Whispering Pines and more for $35, Crow Creek and Sandpiper for $37, can even play for $28 at 2 courses.

Gary


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PostPosted: Thu Mar 01, 2012 4:21 pm 
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Planning on getting the book. PM me the site. Thanks Gary.


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