When you come to think of it that is the secret of most of the great holes all over the world. They all have some kind of a twist. C.B. MACDONALD
E. Michael Johnson has the details, the press release is below, and here are a few quick reactions:
- Golf publications and the Golf Channel will live to see another day if you believe the prognosticators who said a purchase by an "endemic" would have meant consolidation that might end entities that rely on ad buys from the industry. Same deal goes for touring professionals.
- Ten percenters across the land are rejoicing at the thought that Wally Uihlein is staying on as CEO (until he gets tired of commuting halfway around the world to meet his bosses), meaning he's not retiring to manage son Peter's career.
- Sadly, another win for the hedge funders. Not only does Bill Ackman force a sale, but they get lucky and sell to folks who appear---appear--to want the company because it is well-run, well-positioned and stable, not to pick up the golf ball brand and peddle the rest off.
- $1.23 billion is a higher number than many predicted and gives the golf business something to feel good about heading into the weekend. Okay, I'm reaching now.
I'm sure some of you will have different takes and are much more cynical than I when it comes to these press releases. Speaking of which, here's the release:
ACUSHNET COMPANY TO BE ACQUIRED BY GROUP LED BY FILA KOREA LTD. AND MIRAE ASSET PRIVATE EQUITY
Agreement Reached for World's Leading Golf Equipment Company to be Purchased from Fortune Brands
Fairhaven, MA (May 20, 2011) – Acushnet Company announced today that its parent company, Fortune Brands, Inc., has signed a definitive agreement for the sale of the company to a group led by Fila Korea, Ltd., the owner of the Fila brand globally, and Mirae Asset Private Equity, the largest private equity firm in Korea.
Acushnet Company is one of the largest golf equipment companies in the world with annual sales of more than $1.2 billion in 2010. Its premium and storied brands include Titleist, the #1 ball in golf and a leader in high performance golf clubs, and FootJoy, the #1 shoe, glove and performance outerwear brand in golf.
“The Acushnet Company has long been the trusted steward of two of golf’s most revered and iconic brands, and has perpetuated the longest running records of golf equipment success in the game,” said Wally Uihlein, Chairman and Chief Executive Officer, Acushnet Company. “The Fila Korea and Mirae group understands and appreciates our golf industry leadership, passionate associates, and unique and enduring culture. Together, with our new owners, our team is looking forward to strengthening and building upon the global success of the Titleist and FootJoy brands.”
Right out of the press release manual! I smell a v-word coming.
After the acquisition, Acushnet will remain as a standalone company through separate operation from Fila Korea, with its worldwide headquarters remaining in Fairhaven, Mass., and led by Uihlein and Acushnet’s current management team.
The Acushnet Company has a history of successful growth and evolution. The Golf Division was founded in 1932, with the first Titleist golf ball brought to market in 1935. Fortune Brands acquired the Acushnet Company in 1976, and Acushnet acquired FootJoy in 1985. Acushnet’s net sales in 1975 were $51 million and with the combined strength of both brands have grown more than twenty-fold over the past thirty-five years.
No v-word, just a plug for Titleist's and Footjoy's that I had to delete.
“We appreciate what Fortune Brands has contributed to the growth of our business over the last thirty-five years,” said Uihlein. “The support, encouragement and guidance they provided helped fuel our leadership position in the industry and marketplace. Together, we achieved record-setting milestones.”
No love for Bill Ackman for forcing this sale so that he can repave his helicopter pad with gold?
Established in Italy in 1911, Fila is a leading sport and leisure footwear and apparel brand that is distributed worldwide. The group, led by Fila Korea and Mirae, also includes the National Pension Service of Korea, the fourth largest pension fund in the world, and Korea Development Bank, Korea’s largest government-owned bank.
“The acquisition of Acushnet transforms our platform with a stable of premier world class brands,” said Gene Yoon, Chairman and Chief Executive Officer, Fila Korea, Ltd. “We are equally excited to embrace Acushnet’s exceptional management team led by Wally Uihlein. With our extensive knowledge and reach in Asia, we believe that the Acushnet brands have incredible new opportunities for growth in the emerging markets in Asia.”
“We are very impressed with what Acushnet management and employees have accomplished so far,” said JH Ryu, CEO, Mirae Asset Private Equity. “We will fully support the company to remain focused on its core golf expertise and continue driving the growth of the industry.”
"Titleist and FootJoy are powerful global golf brands,” said Uihlein. “The fact that Asia Pacific represents over 30% of the world's total golf equipment spending, and that South Korean golfers are among the most passionate and organized in the game, is testament to the significant investment in the Acushnet Company by the Fila Korea and Mirae group. They recognize the strength of the brands and opportunities for growth particularly in golf's emerging regions.”
The sale is subject to certain closing conditions, including regulatory approvals, and the transaction is expected to close this summer.
The Paulson banktruptcy filing on Doral includes the revelation that the group is not including the Great White course as part of the package, according to this Bloomberg story. This raised a few eyebrows until Douglas Hanks and David Neal explained that they want to develop Norman's Miami masterpiece.
The owners of the Doral resort want to spin-off one of its five golf courses for residential or commercial development, according to court filings.
The move to separate the Doral’s “Great White’’ course — named after designer Greg Norman — probably would not impact the resort’s annual PGA golf tournament, which is played on the famous “Blue Monster.’
Howard Pankratz reports on good news for the Coore-Crenshaw designed home of the 2013 Solheim Cup and a course thought to have been a PGA Championship contender despite having a non-Rees Jones design and August temperatures potentially under 94 degrees.
Colorado Golf Club said "the acquisition marks a new beginning for the club".
Ferrell said the transaction was completed after months of negotiations and cooperation between the membership and other parties - including the original developers, lenders, creditors and New York real estate investor Arendale Holdings.
"I've never seen a more multi-faceted deal," said Ferrell, who has been in the golf business more than two decades. "It is remarkable all the players could make this happen."
I was mostly to nervous for my man Shackleford to notice the pre-race commercials, but it was hard not to be glued to one that ran during the Kentucky Derby and turned out to be for...Nike golf balls!
Pretty impressive piece of work here, with some golf course damage thrown in. Anyone know what course this is? Looks like something Northern California.
Thanks to reader John for Peter Corbett's look at the state of golf clubs in Scottsdale and he reports a lot of membership and dues numbers, very little of it encouraging for developers but great for golfers. He also reveals this recent course purchase:
"This is about the low-water mark I've ever seen," he said.
Scottsdale's Sanctuary Golf Course was sold in the past month to Phil Mickelson and his agent, Steve Loy, for $2.2 million, a price far below its value of five years ago, Garrett said.
Brad Klein, a GolfWeek magazine editor, said the problem at Phoenix and Scottsdale golf clubs is that real-estate development subsidizes the golf operations.
When members take over the golf cub from the real-estate developer, they are forced to cut operating costs or tax themselves to maintain the courses at a high level, he said.
"There is a statement in the industry that the third owner makes the money," Klein said.
The third owner buys a course for $4 million that costs $20 million to build and $4 million to operate annually, he said.
Miracles do happen! And on a Friday of a dreadful earnings report to boot. Thank God Wall Street is above the Friday news dump shenanigans we see from politicians.
Blackstone Group LP (BX.N) is teaming up with Callaway Golf Co (ELY.N) for a possible bid for Fortune Brands Inc's (FO.N) golf business, two sources familiar with the matter said.
A deal could be worth up to $1 billion, one of those sources said. Final bids for the auction, which has attracted interest from Asian bidders, are due on May 9, that source added.
Meanwhile, they freed up some cash by selling three Carlsbad buildings to help pay the fees of two Blackstone junior associates working on the purported bid, reports Pat Maio.
The buildings were sold in March but leased back as part of the company's global plan to reduce more than $84 million in expenses since it launched a cost savings program five years ago.
George Fellows, president and chief executive officer of Callaway, and Brad Holiday, chief financial officer, said in an interview that the golf equipment maker still has $35 million to $40 million left to shave in expenses by 2013.
"It doesn't stop there," Fellows said. "You always look to further improve the value of the company."
Thought I'd get through this without a v-word dropping. Oh well.
Now, I don't know a lot about business, but why would a successful private equity firm team with a fledgling golf company want to buy a successful golf company? Please, help me here?
Normally I cringe at the placement of advertising in ballparks but you have to love when they incorporate ads as part of the quirk of a park, as Taylor Made and the Padres have done this week.
Martin Kaufman profiles developer Lyle Anderson, who is remarkably frank about the project--Hokuli’a on Hawaii’s Kona Coast--that essentially brought his empire down, and also reports that the mastermind behind Desert Highlands, Desert Mountain and Loch Lomond is putting together financing for an "eco-friendly" development in Scottsdale.
Anderson says Hokuli’a was “outselling the market 2 to 1” when it launched in the late 1990s.
Hokuli’a was more than just another development to Anderson. Kizziar says the developer had a “spiritual involvement” with the land, immersing himself in the native Hawaiians’ history and traditions. There were numerous burial sites on the property, and Kizziar says Anderson made sure descendants had access to those sites, even building lava rock walls around some of them.
Then came a lawsuit from Kona residents claiming that the property, which was zoned as agricultural land, needed to be reclassified as urban land, a process that can take years. In 2003, more than five years after Anderson secured zoning permits to build Hokuli’a, state Circuit Court Judge Ronald Ibarra sided with the residents and ordered a halt to development.
By that time, according to the ruling, Hokuli’a already had sold 190 lots and poured $136 million into developing the site.
In 2006, Ibarra approved a settlement of the lawsuit, but the damage had been done.
“We won, but really (the activists) won because they took six years of the greatest market we ever had and we were (left) on the bench,” Anderson says. “That really hurt. It certainly ran up my debts with the bank. That was a difficult thing.”
Steven Davidoff reports that it'll be too late for Fortune Brands/Acushnet/Titleist, but a war is brewing to prevent activist hedge funds from "surreptitiously building large positions." A law firm is pressuring the SEC to change certain rules to prevent a repeat of the situation that has one of golf's most storied brands in a firesale so that one hedge funder can cash in.
"There are really four groups of people that we believe will be part of the process -- we think it will be a robust process," Fortune Brands Chief Executive Officer Bruce Carbonari said on Monday at the Reuters Food and Agriculture Summit in Chicago.
He expects interest from multinational companies, which could include rivals such as Nike Inc (NKE.N) or Adidas (ADSGn.DE), private equity firms, Asian or Middle Eastern sovereign investors and high net-worth individuals.
"This is a very unusual asset. There's people out there who have a real passion for the game," Carbonari said. He declined to say whether the company had received actual bids from these players.
You have to assume though that a "high net-worth individual" has submitted a bid since round 1 ended Friday. Who could it be?
Geoff Shackelford is a Senior Writer for Golfweek magazine, a weekly contributor to Golf Channel's Morning
Copyright © 2022, Geoff Shackelford. All rights reserved.
