With the business day already underway in Germany while most North Americans were tucked into their beds, word came early this morning that the biggest acquisition in the golf world in some time had been agreed upon. The last two major deals in the golf equipment industry saw Puma acquired Cobra from Fortune Brands in 2010 and Acushnet was sold to Fila Korea and Mirae Assets last year.
The adidas Group and Adams Golf, Inc announced that adidas’ TaylorMade-adidas business segment had entered into an agreement to acquire all the outstanding shares of Adams Golf. The price? $10.80 a share, representing a heavy premium for shareholders (approx. 71%) and with the shares to be paid for in cash, it was likely hard to resist.
This makes TaylorMade-adidas, already the biggest company in the game with respect to dales volume, an even more formidable presence.
“This acquisition reflects our commitment to continued growth in the golf category,” said adidas Group CEO Herbert Hainer. “The proposed combination of Adams Golf and TaylorMade-adidas Golf brings together two highly complementary sets of brands, 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.”
“We are very excited to team up with Adams Golf, whose management team we have respected for many years,” commented Mark King, President and CEO of TaylorMade-adidas Golf. “Our mission is to be the best golf company in the world across all geographies, products and customer demographics, and adding Adams Golf is another important step in achieving that goal.”
“This merger provides strong opportunities for our employees, suppliers and partners,” said Barney Adams, Interim CEO of Adams Golf. “The Adams Golf brand will fit nicely into TaylorMade-adidas Golf’s stable of brands, and together we will be able to increase our reach and better serve our customers by leveraging a wider set of resources. We are also excited that TaylorMade-adidas Golf has decided to maintain Adams Golf’s headquarters in Plano, Texas.”
The deal was approved unanimously by the board of Adams Golf and after the normal closing processes and approvals is expected to close by the middle of this year.
In acquiring Adams Golf, TaylorMade-adidas not only swallows up a progressive and profitable competitor with net sales of approximately $97 million in 2011, they also pick up Yes! Putters, Women’s Golf Unlimited, Lady Fairway, and Square 2 brands.