Two golfing enthusiasts who started a business from a shed purchased for £36 in the late 1970s yesterday sold their venture for £40m.

Howard Bilton and Tony Norton founded the American Golf Discount store chain which began in humble surroundings at Ashton-in-Makerfield Golf Club, Lancashire.

The pair built the firm in to a 61-strong chain of stores across Yorkshire, the North, the Midlands, Scotland and Wales.

Mr Bilton will pick up £21.6m and Mr Norton will net £18.4m from the sale to private equity firm LDC. Both men said they wanted to reduce their involvement in the firm.

LDC will use financial support from the Royal Bank of Scotland to fund an expansion of the chain, with plans for at least 25 additional stores over the next five years.

American Golf, which opened its first retail store in Warrington, Cheshire, in 1981, sells branded equipment from manufacturers such as Titleist and Mizuno.

It employs 400 staff, including 85 at its head office and distribution centre in Warrington, and serves more than one million customers a year.

Its accounts for the year to January 26 show the chain made operating profits of £6.7m after annual sales increased 21 per cent to £63.7m.

The new management team will be led by chief executive Jonathan Fellows, the former boss of clothing retailer Bon Marche. Tim Brookes, chairman of photography chain Jessops, has been appointed chairman.

Mr Norton said: "We look forward to seeing the business growth accelerate based on the sound foundations and the service, range and value proposition that we have successfully established."