Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Adidas sells golf unit Taylormade to buyout group KPS

Published 05/10/2017, 02:45 PM
© Reuters. FILE PHOTO: An Adidas logo is seen at the new Futurecraft shoe unveiling event in New York City
ADSGN
-
DBKGn
-
PRTP
-
NKE
-
UAA
-
MODG
-

FRANKFURT (Reuters) - German sportswear maker Adidas (DE:ADSGn) 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 added that following the sale, which it expects to conclude later this year, it will book a charge in the high double-digit to low triple-digit millions of euros range.

Adidas 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 bought TaylorMade in 1997 as part of its $1.4 billion acquisition of French skiing label Salomon, developing it into the world's biggest supplier of golf drivers. It bought smaller Ashworth in 2008 and Adams four years later.

But the golf business has been in decline for years. In 2016, it saw sales decrease 1 percent to 892 million euros, accounting for 5 percent of group sales and down by a third from a peak of 1.34 billion euros in 2012. It continued to be loss-making last year.

The part of the business Adidas is selling accounts for 60 percent of total golf-related revenue. Separately, it has put its ice hockey brand CCM Hockey on the block.

While several other private equity groups showed an interest, rivals such as Nike (N:NKE), Puma (PA:PRTP), Under Armour (N:UAA) and Callaway Golf (N:ELY) decided not to take on additional brands, sources familiar with the sale process said.

© Reuters. FILE PHOTO: An Adidas logo is seen at the new Futurecraft shoe unveiling event in New York City

Guggenheim advised Adidas on the deal, while Deutsche Bank (DE:DBKGn) advised KPS.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.