Adidas says golf unit Taylormade to buyout group KPS

[golfjoe]

http://uk.reuters.com/article/adidas-sale-idUKFWN1IC16E

[swoosh21]

German sportswear maker Adidas is selling its golf equipment and clothing brands TaylorMade, Adams Golf and Ashworth to private equity firm KPS Capital Partners, taking a hit to its earnings.

Adidas will get $425 million, around half of which will be paid in cash and the rest in secured notes and contingent considerations, the company said in a statement on Wednesday.

It had put the loss-making business up for sale last year to focus on shoes and clothing. After peaking around 2000, when Tiger Woods was in his prime, the number of people playing golf in the United States, which accounts for half the global golf market, has fallen sharply.

Adidas also said that following the sale it will book a charge in the high double-digit to low triple-digit millions of euros range.

[JonnyKrasnodar]

Yeah there's some discussion in the other thread.

 

It looks as though this has indeed been in the works for months.

[Kenny Lee Puckett]

well lets hope KPS Capital can come up with all of Rory's money.

[2putttom]

well lets hope KPS Capital can come up with all of Rory's money.

maybe performance pay contract?

[swoosh21]

I'm sure all that has been negotiated.

[bnb9433]

explains the Rory signing

[greggvm]

Another website just announced the sale. Here's an excerpt:

 

We've just received word that TaylorMade CEO, David Abeles, has sent an email to employees notifying them that adidas has sold the company to KPS-Financial, a New York-based private equity firm.|

 

 

 

The Adams and Ashworth brands are also included in the sale.

According to the email, KPS "is committed to the continued growth and development of our brands, business and people."

Abeles adds:

Over the course of the past 12 months, I have personally come to know the leadership team at KPS and, like TaylorMade, they have talented people with strong professional values who share our vision. I couldn't be more thrilled that they have chosen to acquire our company.

Today's announcment, that tTaylorMade will be joining KPS, marks the next step in our journey together, a stepping stone toward realizing our mission and vision, and for all of us, an exciting new chapter.

 

The letter also includes a message of thanks to adidas for its 19 years of support:

 

This is a great moment to reflect on TaylorMade's journey as part of the adidas Group. Being a part of adidas, since 1998, has been an incredible ride. Over the past 19 years TaylorMade has grown to become the innovation and performance leader in the Golf Industry, and has strengthened its market share position in all categories during this period.

Our remarkable growth was made more possible because of adidas' belief and support. I would like to thank Kasper and the wider team in Germany for everything they have done to help us be successful. We look forward to working closely with KPS and the adidas Group over the next several months to insure [sic] a smooth transition for TaylorMade. We are targeting Fall 2017 for an official close date and change of ownership.

As one chapter closes, another one begins. So this is also the beginning of a new and exciting phase in our company's history.

 

Link is here: https://www.mygolfsp...te-equity-firm/

 

Haven't seen anything on Taylor Made, Adidas or KPS sites yet but this seems legit. Update: Golfweek and Shakelford are both reporting the sale as well.

 

​Update:

[sbjinx]

So I guess it was KPS who wanted Rory and not Addias

[uflorida1]

Wow will they make Rory switch shafts to KPS? /sarcasm

[GoIrish17]

Wow will they make Rory switch shafts to KPS? /sarcasm

 

That joke was so funny you had to share it in two threads?

 

http://www.golfwrx.com/forums/topic/1484232-rory-mcilroy-signed-with-taylormade-merged/page__st__390#entry15495504

[GoIrish17]

This is pretty big news in the world of golf. Much bigger news in regards to the larger picture, but the Rory thread is still getting more action than this one.

 

Also- the title of this thread is very confusing. I read it as the exact opposite of the intended meaning.

[JoeyD12]

well lets hope KPS Capital can come up with all of Rory's money.

 

They have had a plan in place for months regarding Rory's money, I can promise you that.

[Kingcat990]

Wow will they make Rory switch shafts to KPS? /sarcasm

 

That joke was so funny you had to share it in two threads?

 

http://www.golfwrx.com/forums/topic/1484232-rory-mcilroy-signed-with-taylormade-merged/page__st__390#entry15495504

 

Had to slap my knee and laugh out loud twice. Been a good day.

[Redbird]

So is Adidas out of the golf clothing and shoe making business as well?

[Holy Moses]

This could make the equity group a ton of money if Day can stay healthy, Tiger's fusion works, and Rory finds a hot putter. $425 million is a great number for somebody.

 

So is Adidas out of the golf clothing and shoe making business as well?

 

No. They kept them bc clothing and shoes make money outside of Ashworth.

[tbowles411]

This could make the equity group a ton of money if Day can stay healthy, Tiger's fusion works, and Rory finds a hot putter. $425 million is a great number for somebody.

 

All this is very true. They're "hedging" their bets! (Sorry it was there! I had to use it!) But if all that takes place, they're going to make their money back quickly and then sell them for top dollar to a larger company.

[caloge]

Wow will they make Rory switch shafts to KPS? /sarcasm

 

That joke was so funny you had to share it in two threads?

 

http://www.golfwrx.c...0#entry15495504

 

[vwgolfer]

This is great news for Callaway. The death of Taylor Made is just beginning. These kind of deals always ruins products especially something like golf. Wait for cheaper and poor quality clubs. It wont work out.

[MB Dirtyy]

Sold for 425 million. Seems really low. Ouch.

[the bishop]

To me it gives some credibility to TM's denial that Rory's deal was for $100M. Not saying he's not getting a boatload of $$ but maybe not $100M.

[benclab]

This is great news for Callaway. The death of Taylor Made is just beginning. These kind of deals always ruins products especially something like golf. Wait for cheaper and poor quality clubs. It wont work out.

KPS is known for doing the opposite. They'll manage their staff and capital more in depthly than adidas did and they'll force them to make quality or nothing products. Manufacturing and profits is their strong suit. This deal puts them over 6 billion in assets.

[halfsumo]

5 layer carbon fiber crowns next year!

[new2g0lf]

$425M is low for a business that was worth 4x that 3-4 years ago. Leads one to wonder, if the price reflective of how desperate Adidas was to dump them, how poorly TM has done financially last 3-4 years or is it a larger indication of an overall decline in the hard goods business.

[halfsumo]

Dear KPS Partners,

 

First order of business: Please tell the custom department to stop automatically tipping every shaft 1" for no reason.

[jackzhang]

what a bargain!

[Bob57]

$425 million and only half in cash, gosh that sounds like less than the rumored dollars they are paying the highly ranked staff.. Compared to Achusnet I am surprised they just didn't close shop like Nike did..Will be interesting for all their leadership and product development as KPS structurally adjusts the company for profitability. In five years they are down to $500 million sales from $1.5 billion yikes. Said over the last few years they have been losing 75-100 million a year... wonder where they get the money to pay the staff from. Have really gone downhill after Sean Toulon left..

[BottleCap]

$425 million and only half in cash, gosh that sounds like less than the rumored dollars they are paying the highly ranked staff.. Compared to Achusnet I am surprised they just didn't close shop like Nike did..Will be interesting for all their leadership and product development as KPS structurally adjusts the company for profitability. In five years they are down to $500 million sales from $1.5 billion yikes.

 

In a couple of days when Acushnet announces earning we will see how they compare to others.

[Bob57]

$425 million and only half in cash, gosh that sounds like less than the rumored dollars they are paying the highly ranked staff.. Compared to Achusnet I am surprised they just didn't close shop like Nike did..Will be interesting for all their leadership and product development as KPS structurally adjusts the company for profitability. In five years they are down to $500 million sales from $1.5 billion yikes.

 

In a couple of days when Acushnet announces earning we will see how they compare to others.

 

Ah the ball may have shortcomings according to Rory, but it definitely brings in the bucks. Will be interesting to see if over the next few years achusnet decides clubs and in particular MOTO is costing them too much money. Wonder how much money PXG is making, as they remind me of Tesla except use Parsons money not taxpayer dollars

[Yanki01]

so new irons/drivers in 8 months rather than 6 months?