Adidas says golf unit Taylormade to buyout group KPS

[Minarets]

Nassau must have seen this coming, hence the new found stock of K-sigs!

[Wooderson]

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.

 

Nobody buys golf equipment...companies based upon resale value.

 

[parrnj]

Without looking at their financials this seems cheap. Hope they can get it turned around

[slprince67]

Without looking at their financials this seems cheap. Hope they can get it turned around

 

I think this will be the death of TaylorMade.....It will be an informercial brand within three years.

[whatshannenin]

Without looking at their financials this seems cheap. Hope they can get it turned around

 

I think this will be the death of TaylorMade.....It will be an informercial brand within three years.

 

Isn't it already? The cheesy commercials and guaranteed distance claims? All they need to do is add "but wait.....if you call now...." and a 1-800 number and they are there. This is what you get when you have delusional people running a golf business, regardless of the quality of product. The internet and backdoor accounts at 40% off didn't help their cause either. I remember jokingly checking Ebay the day the R15 was launched and there were already people selling it at $100 under retail, brand new, not fakes.

[Kingcat990]

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.

 

Nobody buys golf equipment...companies based upon resale value.

 

Most people on here buy golf equipment with resale in mind :)

[Z1ggy16]

Anybody know what TM's sales were the past few years? $425M seems like a pretty good value for the brand. Hopefully having a financial company run the books will help turn TM around and get them on a better business track. I would bet the whole "credit line" thing TM now allows buyers to do was 100% a KPS idea. Very smart move on their end.

[Minarets]

Anybody know what TM's sales were the past few years? $425M seems like a pretty good value for the brand. Hopefully having a financial company run the books will help turn TM around and get them on a better business track. I would bet the whole "credit line" thing TM now allows buyers to do was 100% a KPS idea. Very smart move on their end.

Well it was valued at $1.7 billion 4 years ago, so I'd say $425 would be a tough pill to swallow

[Z1ggy16]

Anybody know what TM's sales were the past few years? $425M seems like a pretty good value for the brand. Hopefully having a financial company run the books will help turn TM around and get them on a better business track. I would bet the whole "credit line" thing TM now allows buyers to do was 100% a KPS idea. Very smart move on their end.

Well it was valued at $1.7 billion 4 years ago, so I'd say $425 would be a tough pill to swallow

Right, so KPS is buying purely based on value, sort of like when you buy stocks based on a company having a fairly low PE and you think there's room for growth.

 

This probably a low to medium low risk buy for them. Half in cash upfront which means they are only spending about 3.5% of their total asset value (not even including cash they have) upfront for a company that probably will turn back around and end up worth more worth in the long term if the right steps are taken.

 

I just can't see TM closing shop and leaving the golf business. Even though sales dropped a ton, they still have a huge market share, especially metal woods. With a huge tour presence and long releases between product lines, I think they will be able to increase their profit amount over the next 3-5 years.

[shotmark]

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.

 

Ford sold Aston Martin to a venture capital co and they don't seem to have done too badly. If these deals ALWAYS ruined products I don't think they'd still be happening. No disrespect as I don't know your background but I'm sure TMAG and KPS know a lot more about this than you.

[uflorida1]

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.

 

Ford sold Aston Martin to a venture capital co and they don't seem to have done too badly. If these deals ALWAYS ruined products I don't think they'd still be happening. No disrespect as I don't know your background but I'm sure TMAG and KPS know a lot more about this than you.

the great news for Callaway is a disciplined competitor focused on profits not market share. This plus Nike leaving the business is a good sign for golf equipment profits going forward.

[sofla]

Without looking at their financials this seems cheap. Hope they can get it turned around

 

I think this will be the death of TaylorMade.....It will be an informercial brand within three years.

 

One thing private equity does well is raped a company then file for bankruptcy. Goodbye TaylorMade

[USGA22]

Without looking at their financials this seems cheap. Hope they can get it turned around

 

I think this will be the death of TaylorMade.....It will be an informercial brand within three years.

 

One thing private equity does well is raped a company then file for bankruptcy. Goodbye TaylorMade

 

Pretty generic statement lumping KPS in with all private equity firms. I see nothing in their history or portfolio that indicates that is a possibility. If you have a certain example of KPS of "raping" then tossing a company to the bankruptcy heap, please share. I for one think it is a steal for KPS, and hope they forge ahead with producing fine golf equipment.

[Kylekoz17]

Without looking at their financials this seems cheap. Hope they can get it turned around

 

I think this will be the death of TaylorMade.....It will be an informercial brand within three years.

 

One thing private equity does well is raped a company then file for bankruptcy. Goodbye TaylorMade

 

Just like when Titleist was sold to private equity firm? How are they doing now? Taylormade will be just fine

[creecool]

Taylormade is adding customer service reps who will be available on Saturdays, as opposed to being closed every weekend. This appears to be a shift from the sale by Adidas group. It is yet to be seen how KPS will provide new leadership, but they have been slipping ever since Chip Brewer left for Callaway.

[warfelg]

I love how we're 3 days into this and people are saying TM will shutter already. Look a bit into KPS and what they do before you bash it.

 

They have a history of buying some depressed assets, building it up, and selling for a profit before going onto the next venture. I bet they will build up TM again to something relevant. What I really hope is they bring Adams back around. I will forever be pissed about what Adidas did to Adams, basically buying them to avoid a lawsuit. Disgraceful.

[MaddMaxx]

If they don't want to develop the products the value is in the patents. I don't know what TM holds but I would think there would be some value in them if they want to dump the company.

 

Titleist, Callaway, King, Mizuno, Wilson, Ping, Exotics, JDM stuff.

Nike gone, Hogan gone, TM ???

I think there is still room for more cutting. How many brands can a shrinking customer base support?

 

Who will be next...... I predict Tour Edge

[lowheel]

Sold for 425 million. Seems really low. Ouch.

 

In the end it will be even less when they look deeper into the books. Theyll settle in the 320 range.

[lowheel]

Without looking at their financials this seems cheap. Hope they can get it turned around

 

It isnt, they burn through money left and right. I laughed when i heardabout this last october as my buddy works for them in carlsbad and sat in on a meeting discussing potential sale and how they were going to hold out for 1.2 billion minimum. My friend laughed at this because he knows the internal #s and basically told me" alot of us will be gone is 6 months when a venture capital firm buys us up for nothing" he called it and now i worry for him. Hes got 3 little kids. I hope he stays on

[warfelg]

If they don't want to develop the products the value is in the patents. I don't know what TM holds but I would think there would be some value in them if they want to dump the company.

 

Titleist, Callaway, King, Mizuno, Wilson, Ping, Exotics, JDM stuff.

Nike gone, Hogan gone, TM ???

I think there is still room for more cutting. How many brands can a shrinking customer base support?

 

Who will be next...... I predict Tour Edge

 

I don't think anyone is going to get out of the market for a while save Wilson.

 

Nike and Hogan both tried to break into the mass hard goods market. All those other brands are established. Even with Callaway eating into Taylormade's market share these past 2-3 years, TM is still well ahead of where those brands were when they left.

 

As for Taylormade, I'll say the same thing I said about a year or two ago:

Build a brand nomenclature again. Everyone knows a "9-- D" or "7-- AP-" is a Titleist product. Everyone knows a "G-series" product is a Ping. Callaway is settling into "Big Bertha", "XR" and "Apex" as it's lines. Personally I was hoping Taylormade would riff off of what Titleist does and name this years woods and irons M117 and M217. The mistake (IMO) wasn't just the release cycle, it was the release cycle and name changing. No one could keep up with what was "game improvement" and what was "players" in their line of clubs.

 

Here's what I would love to see KPS do with Taylormade/Adams:

2017: Bring the Rors-proto Irons to the market as TP stamped clubs.

2018: Update the M Drivers. Expand the TP clubs to include 440cc driver heads, and the tour M2 head shape. Bring back the Adams XTD iron line.

2019: Update Iron lines to include 1) TP stamped Blades 2) New P750's stamped TP 3) New P770's stamped TP 4) Updated M1 line 5) Updated M2 line 6) Include a MDI (M-line driving iron). Adams made some great hybrids so dust off and update those.

2020: Get on a cycle with clubs that's consistent.

 

By then you got:

TP lines.

M lines.

Adams with a nice collection of niche items.

[CasualLie]

I wouldn't worry too much about big changes. Sure, Ashworth and Adams go away because they are worthless, but any talk of significant TM product line revamp is not going to happen. KPS knows what they are doing. Step 1, drive a low sale price and minimize risk right out the gate...check. Step 2, cut costs and waste everywhere including the bloat in R&D. Step 3, look for mfg and supplier inefficiencies and fix. Step 4. Sell for $800M in 5 years.

 

You might see a change in approach in contracts to tour players, but not a lot. They are a business model built on the marquee players and claiming #1 Driver, Irons, etc...in golf. They lost that a bit to Callaway, so priority one is to get it back.

 

Disclaimer: I am not a TM guy, so really don't care at all what they do day to day, but I now the brand is not going anywhere; plenty of room in the market for them to operate since they only really compete with Callaway.

[bscinstnct]