KPS Capital Partners has signed an agreement to acquire the TaylorMade Golf Company from Adidas for total consideration of $425 million. Half of the purchase price will be paid in cash and the balance paid over time under a secured note and through contingent considerations.
TaylorMade is a designer and manufacturer of golf equipment including drivers, fairway woods, hybrids, irons, wedges, golf balls and accessories. The company is led by CEO David Abeles and is headquartered in Carlsbad, CA (www.taylormadegolf.com).
“TaylorMade is one of the preeminent golf equipment brands worldwide, with leading-edge products that consistently provide consumers a distinct performance advantage over the competition,” said David Shapiro, a Managing Partner of KPS. “We look forward to working with David Abeles, his management team and all TaylorMade employees around the world to build on this great platform by driving growth both organically and through strategic acquisitions.”
TaylorMade was founded in 1979 by Gary Adams in a leased 6,000 square foot building near Chicago in McHenry, IL. The company began with three employees and sold only one item, a newly invented 12-degree loft metalwood. The metalwood was unique in its steel construction – replacing 
persimmon as the primary material from which modern drivers are manufactured – and adopted the nickname “Pittsburgh Persimmon”. TaylorMade was independently owned until 1984 when Salomon, a French a sports equipment manufacturing company known for its ski products, acquired the company. In 1997 Adidas acquired Salomon.
In 2012, TaylorMade had total revenues of $1.5 billion. Last year, total revenues were approximately $970 million. In August 2016, Adidas’ biggest competitor, Nike, announced that it would exit the golf equipment business. In September 2016, Golfsmith, the world’s largest golf retailer, filed for Chapter 11 bankruptcy. Golf participation has been on a slow and steady decline for two decades and participation among millennials has been particularly weak.
KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with approximately $5.6 billion of assets under management that invests in restructurings, turnarounds and other special situations. KPS targets manufacturing and industrial companies that are going through a period of transition or experiencing operating or financial difficulties. The firm’s portfolio companies have aggregate annual revenues of approximately $6 billion, operate 98 manufacturing plants in 23 countries, and employ over 42,000 people worldwide. KPS Capital Partners is headquartered in New York (www.kpsfund.com).
“This is the beginning of an exciting new era for TaylorMade, and our entire management team is excited to partner with KPS in this next phase of our growth and continued development of our brands, business and people,” said Mr. Abeles. “Given their strategic vision, operational resources and significant access to capital, KPS is the ideal partner to help TaylorMade build upon its strong momentum.”
Completion of this transaction is expected later in 2017.
© 2017 Private Equity Professional | May 12, 2017
