TWO golfing enthusiasts have swung their way to a £40 million profit after selling their UK-based sports store chain, American Golf Discount, to LDC, the private equity firm.
Tony Norton, who will take home about £18.4 million, and Howard Bilton, who gains £21.6 million from the deal, will retain a 15 per cent stake between them in the business and continue to work as consultants to the new owners.
The two founders have been looking to scale back their involvement in the company for some time, although both were keen to retain an interest in the business. Mr Norton said yesterday that the new management would inherit a business with strong growth potential.
Jonathan Fellows, the former finance director of Bonmarché, the low-price clothing retailer, will become chief executive while Tim Brooks, the former chairman of Jessops, will be chairman.
Mr Bilton and his brother Robert, both professional golfers, began by selling equipment on golf courses in the 1970s. Mr Norton, a golfing novice with knowledge of finance from his former job in accounts with IBM, joined the group in 1981, the year the first store opened in Warrington, Cheshire.
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Howard Bilton and Mr Norton bought out Robert Bilton in 1998 after securing a £4 milion loan from NatWest to expand the business.
The company, now Europe’s biggest golf equipment retailer, employs 400 people at 61 stores across the North with an expanding number of outlets in the South and South East of England.
LDC, a subsidiary of Lloyds TSB, the bank, believes it is possible to open a further 25 stores over the next five years.
Mr Fellows said: “American Golf Discount is already the UK’s leading golf specialist, reflecting a unique combination of expert professional advice and services, the most comprehensive range of golf equipment and accessories and exceptional value.”
In the year to January 2004 American Golf, which sells 30 brands such as Callaway, TaylorMade, Titleist and Ping, made an operating profit of £6.7 million on annual sales of £63.7 million, up 21 per cent on the previous year.
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Martin Draper, a director of LDC, said American Golf matched the private equity firms investment criteria perfectly: “Well established in its field, capable of significant growth by organic expansion and led by a committed and professional team.”