Centroid Closes $1.87 Billion Purchase Of Taylormade And Already Planning For Public Offering
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The Korea Herald’s Son Ji-hyoung reports on Centroid Investment Partners closing “a $1.87 billion deal to buy a 100 percent stake in TaylorMade Golf from US private equity firm KPS Capital Partners” and already announcing intentions of a public offering. I.E. exiting.
The buyout deal will lay the groundwork for the US-based golf equipment and clothing maker to go public in the future, the Korean investor said.
When TaylorMade does go public, the investor consortium will have enough room to seek a “considerable amount of capital gain” as they look to price the offered shares when comparing with US-listed peers, Centroid said in a statement.
According to Centroid’s company analysis, TaylorMade’s enterprise valuation is set lower than the two listed golf product rivals Acushnet Holdings and Callaway Golf, considering the three firms’ profit-generating capacity.
Now I don’t know a lot about this stuff, but “redeemable preference shares for risk hedging” sounds like a lot of debt to service.
The transaction comprises $532 million in equity, $405 million in redeemable preference shares for risk hedging, as well as $933 million financed for senior and subordinated debts combined.
Almost a billion. I think that’s a lot of drivers to sell to pay off the interest.
The story also implies apparel maker F&F will be a big part of the equation:
Centroid has worked with numerous partners in Korea, including outfit manufacturer F&F, Korea Federation of Community Credit Cooperative, National Credit Union Federation of Korea and Yuanta Securities Korea.
Of them, F&F is a strategic partner that has injected 500 billion won ($434.4 million) in Centroid, according to a filing submitted to domestic financial authorities. F&F holds the contractual right to be given priorities when the TaylorMade Golf shareholder is engaged in a new business transaction, according to Centroid.
