Drive Shack Inc. Closes $34.5 Million Sale of Its Rancho San Joaquin, CA Golf Property
October 19 2020 - 6:48AM
Business Wire
American Golf Corporation will continue to
operate the facility under a management agreement
Sale proceeds to be used to finance next
phase of strategic growth plan, including Drive Shack New
Orleans and the launch of The Puttery in 2021
Drive Shack Inc. (NYSE: DS), a leading owner and operator of
golf-related leisure and entertainment businesses, announced the
sale of its Rancho San Joaquin golf course, located in Irvine,
California, to a private investment group. American Golf, a
subsidiary of Drive Shack Inc., will continue to operate the
facility under a management agreement.
At closing, the Company received net proceeds of approximately
$33.6 million in cash, which included the purchase price of $34.5
million less transaction costs and adjustments to the sale price
for working capital of approximately $0.9 million. Proceeds from
the sale will be used to finance the next phase of the Company’s
strategic growth plan, including Drive Shack New Orleans and the
launch of The Puttery Dallas in 2021, as well as for general
corporate purposes.
“The sale of our Rancho golf property is an important milestone
as we near the completion of our asset monetization strategy of our
owned courses, while optimizing and growing our leased and managed
courses,” said Chief Executive Officer, Hana Khouri. “We will work
strategically with the new ownership group to ensure the continued
success of the golf course, including Rancho San Joaquin’s robust
Players Club membership.”
Khouri added, “Our plan to successfully launch The Puttery and
open our New Orleans Drive Shack venue remains on track for 2021.
Proceeds from this sale, coupled with ongoing measures currently in
place, provides capital to fund these commitments and navigate the
current environment. This is a key milestone in our long-term
strategic financial plan focused on providing capital to fund a
path to operating 50+ Puttery venues by the end of 2024. I look
forward to sharing more details on our upcoming third quarter
earnings call in early November.”
Forward-Looking Statements
The Company cautions that this release contains forward-looking
statements. Forward-looking statements involve risks and
uncertainties. Accordingly, actual results may differ materially
from the forward-looking statements, and the Company therefore
cautions you against relying on such forward-looking statements.
Future factors that could cause actual results or other
expectations or intentions to differ from those included in
forward-looking statements include, without limitation, the
uncertain and unprecedented impact of the COVID-19 pandemic on our
business and operations and the related impact on our liquidity
needs; our ability to continue as a going concern; our ability to
access funding sources; the potential imposition of
government-mandated and voluntary shutdowns relating to the
COVID-19 pandemic; the level of customer demand during the onset
and continuance of the COVID-19 pandemic and thereafter; the
economic impact of the COVID-19 pandemic and related disruptions on
the communities we serve; our overall level of indebtedness and
leverage; general business and economic conditions; the impact of
competition; the seasonality of the Company's business; adverse
weather conditions; guest and employee complaints and litigation;
labor costs and availability; changes in consumer and corporate
spending; changes in demographic trends; changes in governmental
regulations; unfavorable publicity, our ability to open new venues,
and acts of God. The Company intends these forward-looking
statements to speak only as of the time of this release and does
not undertake to update or revise them as more appropriate
information becomes available, except as required by law.
About Drive Shack
Drive Shack Inc. is a leading owner and operator of golf-related
leisure and entertainment businesses.
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version on businesswire.com: https://www.businesswire.com/news/home/20201019005243/en/
Investor Relations Kelley Buchhorn 646-585-5591
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