TaylorMade buys Adams Golf -- CEO Mark King: “We want Adams to keep its identity”

[zakkozuchowski]

Details from Mark King's conference call (merged)

Mark King: "We want Adams to keep its identity"

By Zak Kozuchowski

GolfWRX Managing Editor

Adidas Group, the parent company of TaylorMade-adidas, announced Monday that it has agreed to purchase Adams Golf brand for the approximate price of $70 million.

TaylorMade will acquire all outstanding shares of Adams for 10.80 per share in cash. The agreement is subject to shareholder and government approval, which TaylorMade CEO Mark King expects to be finalized by midyear.

Adams will remain in its current headquarters in Plano, Texas, a decision King said was made because of his company's struggles with previous company acquisitions.

"We want Adams to keep its identity," King said in a Monday conference call. "Treating them as an affiliate helps their growth."

King said that the purchase of Adams Golf emphasizes his company's commitment to growth, and strengthens TaylorMade's ability to market to players seeking game improvement clubs, as well as women and seniors, segments that are very strong in the Adams brand. He also said that for a smaller company, Adams had great ideas around intellectual property, which was a very enticing part of the deal.

"One of the things that having multiple brands helps you do is explore different product strategies," King said. "We didn't really take an approach on this around synergy. But if there are those we can take naturally, we'll do it. But we're not going to put Adams and Yes! products in the TaylorMade tour van … I don't see the products streamlining."

King said that TaylorMade's voice is directed at players with handicaps between 0-4, such as serious amateurs, college players and professionals. There had been conversation at TaylorMade about releasing a senior line, but King said his company made the decision to keep marketing aimed at "the top of the pyramid."

"We made a foray into women's club," King said, "but when you don't market it heavily and you don't have your heart in it, that's what you get. [Adams] is in the sweets spot of the group we don't market to today."

One of the first orders of business for TaylorMade will be locating a leader for the Adams brand. Former CEO Chip Brewer left Adams Golf for Callaway Golf on Feb. 28, leaving Adams Golf founder Barney Adams as the interim CEO. King said TaylorMade is looking for a candidate this is willing to live in Plano and can emotionally connect with the brand. His company is searching inside its brand, as well as doing an executive search.

King said that TaylorMade can help Adams in several areas, such as the international community. According to King, company sales for Adams are only 10 percent overseas, while TaylorMade sells about 60 percent of its products internationally.

"The [international] network already exists," King said. "They would be funneling product into existing channels."

According to King, this will most likely be done through a small Adams team working with TaylorMade's infrastructure outside the U.S., and possibly creating specific product lines for countries such as Asia, which is common for large OEMs such as TaylorMade.

Adams also lacks a golf ball and accessory lines, which King said TaylorMade could bolster for Adams.

[golfnhack]

That's awesome. The new company name will be "T & A"

[rgk5]

[quote name='zakkozuchowski' timestamp='1332179039' post='4536655']
[b]Mark King: "We want Adams to keep its identity"[/b]

[b]By Zak Kozuchowski[/b]

[b]GolfWRX Managing Editor[/b]

Adidas Group, the parent company of TaylorMade-adidas, announced Monday that it has agreed to purchase Adams Golf brand for the approximate price of $70 million.

TaylorMade will acquire all outstanding shares of Adams for 10.80 per share in cash. The agreement is subject to shareholder and government approval, which TaylorMade CEO Mark King expects to be finalized by midyear.

Adams will remain in its current headquarters in Plano, Texas, a decision King said was made because of his company's struggles with previous company acquisitions.

"We want Adams to keep its identity," King said in a Monday conference call. "Treating them as an affiliate helps their growth."

King said that the purchase of Adams Golf emphasizes his company's commitment to growth, and strengthens TaylorMade's ability to market to players seeking game improvement clubs, as well as women and seniors, segments that are very strong in the Adams brand. He also said that for a smaller company, Adams had great ideas around intellectual property, which was a very enticing part of the deal.

"One of the things that having multiple brands helps you do is explore different product strategies," King said. "We didn't really take an approach on this around synergy. But if there are those we can take naturally, we'll do it. But we're not going to put Adams and Yes! products in the TaylorMade tour van … I don't see the products streamlining."

King said that TaylorMade's voice is directed at players with handicaps between 0-4, such as serious amateurs, college players and professionals. There had been conversation at TaylorMade about releasing a senior line, but King said his company made the decision to keep marketing aimed at "the top of the pyramid."

"We made a foray into women's club," King said, "but when you don't market it heavily and you don't have your heart in it, that's what you get. [Adams] is in the sweets spot of the group we don't market to today."

One of the first orders of business for TaylorMade will be locating a leader for the Adams brand. Former CEO Chip Brewer left Adams Golf for Callaway Golf on Feb. 28, leaving Adams Golf founder Barney Adams as the interim CEO. King said TaylorMade is looking for a candidate this is willing to live in Plano and can emotionally connect with the brand. His company is searching inside its brand, as well as doing an executive search.

King said that TaylorMade can help Adams in several areas, such as the international community. According to King, company sales for Adams are only 10 percent overseas, while TaylorMade sells about 60 percent of its products internationally.

"The [international] network already exists," King said. "They would be funneling product into existing channels."

According to King, this will most likely be done through a small Adams team working with TaylorMade's infrastructure outside the U.S., and possibly creating specific product lines for countries such as Asia, which is common for large OEMs such as TaylorMade.

Adams also lacks a golf ball and accessory lines, which King said TaylorMade could bolster for Adams.
[/quote]
.
Allow me to translate King's remarks

"We were marketing to all those windmills who THOUGHT they played to a 0-4 handicap. As for the rest of you honest golfers with real handicaps, go pound salt."

"Our SGI clubs were not really that good. So now that we have Adams you can blissfully ignore all our previous remarks about MWT forgiveness, adjustabilty and so on."

" Happily, we can forget about TM clubs for women and can abandon that market to Adams branded equipment. Ladies, than you for your previous support."

"We will rename those granite hard Burner Plus balls as Adams Cannon Balls since Rocketballz is already used."

All of this is tongue 'n cheek of course.

[CMUgol4]

[quote name='zakkozuchowski' timestamp='1332179039' post='4536655']
[b]Mark King: "We want Adams to keep its identity"[/b]

[b]By Zak Kozuchowski[/b]

[b]GolfWRX Managing Editor[/b]

"One of the things that having multiple brands helps you do is explore different product strategies," King said. "We didn't really take an approach on this around synergy. But if there are those we can take naturally, we'll do it. But we're not going to put Adams and Yes! products in the TaylorMade tour van … I don't see the products streamlining."

[/quote]
This part stinks. Adams tour stuff (both tour only and items that eventually made it to retail) were awesome. Still miss my Idea Pro irons (based on the A3) and love my FW and Hybrids from them. No tour presence probably means their design will stagnate and probably be relegated to Dicks and GG, unless they're going to maintain an Adams/YES tour van as well.

[Peoples Golf]

[quote name='CMUgol4' timestamp='1332185222' post='4537269']
[quote name='zakkozuchowski' timestamp='1332179039' post='4536655']
[b]Mark King: "We want Adams to keep its identity"[/b]

[b]By Zak Kozuchowski[/b]

[b]GolfWRX Managing Editor[/b]

"One of the things that having multiple brands helps you do is explore different product strategies," King said. "We didn't really take an approach on this around synergy. But if there are those we can take naturally, we'll do it. But we're not going to put Adams and Yes! products in the TaylorMade tour van … I don't see the products streamlining."

[/quote]
This part stinks. Adams tour stuff (both tour only and items that eventually made it to retail) were awesome. Still miss my Idea Pro irons (based on the A3) and love my FW and Hybrids from them. No tour presence probably means their design will stagnate and probably be relegated to Dicks and GG, unless they're going to maintain an Adams/YES tour van as well.
[/quote]


I wondered this too... It will be tough to sell product if you dont have any in play.

[pearls24]

What makes no sense to me are the comments designating Adams as a GI club company. I think Adams irons are far superior for the better player then all of the current TM irons. In my opinion, TM hasn't had a good iron since the TP MB or the 2004 Miura forged CB's. Adams has stepped it up with the Pro Golds, CB1's and MB2's and offer the CB2's/3's, etc. They appeal to a much wider demographic then they are given credit for. I love TM woods but much prefer Adams irons and hybrids. Hope they keep it as a stand alone brand but better market and sell. TM can def. help Adams get product to the market better and have the inventory so they don't run into issues like they have been with constant delays on new product. Keeping my fingers crossed!

[Rohlio]

BOOOOOOOOOOOOOOOOOOO!

[rgk5]

With no Yes! putters or other Adams product in the Tour Van this leads me to make the following SWAGs; aka a number of Scientific Wild AZZ Guess's.

1. Adams clubs will be relegated to "value pricing" like Wilson's 11 pc Pro Staff gear.

2. The Adams Tour Van will be restricted to the Champions and LPGA Tour or only one of same.

3. A cart bag containing an offset driver, 3 and 5 woods, 4,5,6, hybrids,7-SW, large MOI putter, all for $599 or less.

Have you noticed how few LPGA and Champions Tour players have TMAG deals?

[Ranger Rick]

Would they not have a separate ADAMS van? Thats how I read it.

[wjdpar1]

I don't see the fit. Adams = Ben Hogan.

Sorry.

[Tiger512]

Taylormade is too good at marketing to just eliminate the Adams tour presence. That has been huge for them.

[MCoz]

[quote name='rgk5' timestamp='1332186496' post='4537473']
With no Yes! putters or other Adams product in the Tour Van this leads me to make the following SWAGs; aka a number of Scientific Wild AZZ Guess's.

1. Adams clubs will be relegated to "value pricing" like Wilson's 11 pc Pro Staff gear.

2. The Adams Tour Van will be restricted to the Champions and LPGA Tour or only one of same.

3. A cart bag containing an offset driver, 3 and 5 woods, 4,5,6, hybrids,7-SW, large MOI putter, all for $599 or less.

Have you noticed how few LPGA and Champions Tour players have TMAG deals?
[/quote]
Adams will have their own tour van as they do now.
TM has not chased the Champions Tour nor the LPGA and now they will be a part of that.

[tbowles411]

[quote name='Tiger512' timestamp='1332189562' post='4537829']
Taylormade is too good at marketing to just eliminate the Adams tour presence. That has been huge for them.
[/quote]
Honestly, I think folks are just overreacting. There's always that risk of a product line being removed from circulation, but what works will probably be incorporated into TaylorMade somehow or allow to stand on its own. What doesn't will be phased out. I don't think the quality of what Adams put out was in question. It just didn't translate into sales, which is the bottom line of any company. MB2s are outstanding. But if you're only selling 50 sets a month (arbitrary number), it's a failure.

Adams wouldn't be in this position if people were buying their stuff and if they were aggressively marketed...a la...I don't know...like TaylorMade. They were losing money. TaylorMade threw it a lifeline, because they saw potential in the brand and in what they were doing. And frankly, they could.

[Zach Heusser]

I read it as Adams will keep its tour van...

[cgbm]

well there goes the best hybrids ever made!!!!


damn.

[Antnee94]

[quote name='MCoz' timestamp='1332190038' post='4537885']
[quote name='rgk5' timestamp='1332186496' post='4537473']
With no Yes! putters or other Adams product in the Tour Van this leads me to make the following SWAGs; aka a number of Scientific Wild AZZ Guess's.

1. Adams clubs will be relegated to "value pricing" like Wilson's 11 pc Pro Staff gear.

2. The Adams Tour Van will be restricted to the Champions and LPGA Tour or only one of same.

3. A cart bag containing an offset driver, 3 and 5 woods, 4,5,6, hybrids,7-SW, large MOI putter, all for $599 or less.

Have you noticed how few LPGA and Champions Tour players have TMAG deals?
[/quote]
Adams will have their own tour van as they do now.
TM has not chased the Champions Tour nor the LPGA and now they will be a part of that.
[/quote]

Let's face it, Adams has the best female golfer right now in Seng. Also Brittney Lincecome, isn't bad either. As far as TMAG, between Creamer & Gulbis, they have two of the most visible LPGA players. They seem to chase the right high profile player as opposed to the bulk on the PGA Tour.

I wonder if the Kenny Perry's switch to Adams was a foreshadowing and he knew this was coming. It seems to make more sense today. TMAG on the Champions Tour has Lehman, Faldo & Norman as ambassadors. Norman plays once in a while. Again they got the high profile guys not bulk. Does Pavin still play TMAG?

[mdb0103]

$70 million huh? I have some friends who could have bought it at that price. It'll be interesting to see what happens. Adams stuff has come a long way in my opinion, I hope Taylormade doesn't change that...

[Jamboy72]

I don't understand the fear that Adams is going to somehow become this cheap value golf brand? Why would tm acquire it and then run it into the ground?

[markheardjr]

That intellectual property part is key. What they should say is "We bought them because it was cheaper than a lawsuit over the likeness in designs of our RBZ 3 wood and their F11 3 wood.

[Rohlio]

[quote name='topekareal' timestamp='1332191733' post='4538069']
I don't understand the fear that Adams is going to somehow become this cheap value golf brand? Why would tm acquire it and then run it into the ground?
[/quote]

Because it has happened time and again throughout every sector of business, but especially obviously in the golf world. They buy a brand gut it's IP, attach the name to their entry level crap (all-in-one sets, etc.) and then layoff and cannibalize the companies infrastructure.

[setter02]

[quote name='Antnee94' timestamp='1332190834' post='4537979']
[quote name='MCoz' timestamp='1332190038' post='4537885']
[quote name='rgk5' timestamp='1332186496' post='4537473']
With no Yes! putters or other Adams product in the Tour Van this leads me to make the following SWAGs; aka a number of Scientific Wild AZZ Guess's.

1. Adams clubs will be relegated to "value pricing" like Wilson's 11 pc Pro Staff gear.

2. The Adams Tour Van will be restricted to the Champions and LPGA Tour or only one of same.

3. A cart bag containing an offset driver, 3 and 5 woods, 4,5,6, hybrids,7-SW, large MOI putter, all for $599 or less.

Have you noticed how few LPGA and Champions Tour players have TMAG deals?
[/quote]
Adams will have their own tour van as they do now.
TM has not chased the Champions Tour nor the LPGA and now they will be a part of that.
[/quote]

Let's face it, Adams has the best female golfer right now in Seng. Also Brittney Lincecome, isn't bad either. As far as TMAG, between Creamer & Gulbis, they have two of the most visible LPGA players. They seem to chase the right high profile player as opposed to the bulk on the PGA Tour.

I wonder if the Kenny Perry's switch to Adams was a foreshadowing and he knew this was coming. It seems to make more sense today. TMAG on the Champions Tour has Lehman, Faldo & Norman as ambassadors. Norman plays once in a while. Again they got the high profile guys not bulk. Does Pavin still play TMAG?
[/quote]


That's right, Tseng and Lincecome to win events, the other 2 to just smile and wave to the camera :P

[monkeynaut]

[quote name='topekareal' timestamp='1332191733' post='4538069']
I don't understand the fear that Adams is going to somehow become this cheap value golf brand? Why would tm acquire it and then run it into the ground?
[/quote]
B/c $70 million is NOTHING. You acquire inventory and some patents which you can then use under your name and you eliminate competition.
As others have noted, this is SOP and we've seen it happen enough times before to see the writing on the wall.

[rgk5]

The plot thickens as legal firms sharpen their claws.


Levi & Korsinsky LLP Announces Investigation Into Possible Breaches Of Fiduciary Duty By Board Of Adams Golf, Inc. In Connection With Sale Of Company To Taylormade-Adidas Golf Company
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503513

Kendall Law Group Investigates Adams Golf, Inc.
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503495

Briscoe Law Firm And Powers Taylor, LLP Investigate Acquisition Of Adams Golf, Inc. By TaylorMade-adidas Golf Company
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503482

Pomerantz Law Firm Investigates Claims On Behalf Of Investors Of Adams Golf, Inc
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503470

[wolfpack]

This is bad all around. The last thing TM needs is more market share.

[MadGolfer76]

One word...FastBallz.


...with slot technology...(snicker)

[NYKnuckleballer]

[quote name='rgk5' timestamp='1332193080' post='4538245']
The plot thickens as legal firms sharpen their claws.


Levi & Korsinsky LLP Announces Investigation Into Possible Breaches Of Fiduciary Duty By Board Of Adams Golf, Inc. In Connection With Sale Of Company To Taylormade-Adidas Golf Company
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503513

Kendall Law Group Investigates Adams Golf, Inc.
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503495

Briscoe Law Firm And Powers Taylor, LLP Investigate Acquisition Of Adams Golf, Inc. By TaylorMade-adidas Golf Company
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503482

Pomerantz Law Firm Investigates Claims On Behalf Of Investors Of Adams Golf, Inc
http://www.reuters.com/finance/stocks/ADGF.O/key-developments/article/2503470
[/quote]

Those are ambulance chasers, hoping to collect fees from any disgruntled shareholders who thought the price should've been higher. Google their names and you'll see they "investigate" each and every sale whether the price is market-supported or not.

[Jamboy72]

Well it will be interesting to see what happens. If king really wants Adams to maintain its identity how will tm accomplish this?

[bpark1210]

[quote name='topekareal' timestamp='1332191733' post='4538069']
I don't understand the fear that Adams is going to somehow become this cheap value golf brand? Why would tm acquire it and then run it into the ground?
[/quote]


TMAG will ruin what Adams has achieved in the last 10 years. TMAG is lableing Adams as a GI brand. The days of innovation will be reserved for TMAG branding to push out new clubs while Adams get's the back seat. The last few years TMAG hasn't produced a players iron that even comes close to what Adams has done: CC1, MB2, CB1, CB2, A12. Velocity slot tech (ripp'd by TMAG and turned into Rocket Ballz), Speedline, the 9015D, arghhh makes me mad to even think about it all going the GI route.

Still don't believe that TMAG won't push Adams to the curb, here is a comment straight from the Adidas CEO:

"This acquisition reflects our commitment to continued growth in the golf category," said Herbert Hainer, CEO of adidas Group, TaylorMade's parent company. "The proposed combination of Adams Golf and TaylorMade-adidas Golf brings together two highly complementary sets of brands, [b]combining Adams' focus on game-improvement as well as senior and women golfers with TaylorMade-adidas Golf's focus on the younger and the low-to-mid handicap golfer[/b]."



Read More [url="http://www.golfdigest.com/golf-equipment/blogs/hotlist365/2012/03/taylormade-reaches-agreement-t.html#ixzz1pbIaeA8I"]http://www.golfdigest.com/golf-equipment/blogs/hotlist365/2012/03/taylormade-reaches-agreement-t.html#ixzz1pbIaeA8I[/url]

[TheMoneyShot]

This is the best news of the day! Great move TM!!

[proguy]

Perhaps this was a settlement for stealing the speedslot AKA RBZ.