Recent Acquisitions in the Golf Industry
Breaking Down the TaylorMade and Full Swing Acquisitions
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Hey Golfers -
We have seen two major acquisitions within the golf industry in the last six months, TaylorMade and Full Swing.
Let’s break them down.
TaylorMade
TaylorMade announced it was being acquired by Centroid Investment Partners on May 11th, 2021, from KPS Capital Partners. Centroid Investment Partners is a private equity firm based in Seoul, South Korea.
KPS Capital Partners originally acquired TaylorMade from Adidas in 2017 for $425 million. The acquisition included TaylorMade, Adams, and Ashworth brands. The deal was done in cash and a combination of secured notes and contingent considerations.
The Korea Herald reported that Centroid Investment Partners paid $1.87 billion for TaylorMade. This is in line with a February New York Times report stating Morgan Stanley was looking for a $2 billion valuation on TaylorMade. This represents a 340% return for KPS Capital Partners in just a four-year span, remarkable.
TaylorMade’s Ownership History
TaylorMade has an interesting ownership history. Like so many great companies, TaylorMade was founded in a small 6,000 square foot building. With a $24,000 loan, Gary Adams started TaylorMade in McHenry, Illinois, with one item, the metal wood.
How did TaylorMade end up with Adidas?
Here is where it gets interesting. In 1984, just five years after Gary Adams founded TaylorMade, he sold the company to French-based ski equipment manufacturer, Salomon. Salomon needed to diversify its business, and TaylorMade needed capital. The synergy made sense.
In 1997 Salomon eventually sold to Adidas for $1.4 billion. The sale included TaylorMade. Adidas eventually held onto TaylorMade for 20 years before the sale to KPS Capital Partners in 2017.
What is next for TaylorMade?
Centroid Investment Partners will likely take TaylorMade public in the future, meaning TaylorMade will be its own entity for the first time since Mr. Adams sold TaylorMade to Salomon in 1984.
TaylorMade has two major competitors that trade publically on the U.S. Stock Exchanges:
Acushnet
Callaway
Acushnet’s current Market Cap is $3.79 billion with an EBITDA of $391.2 million; a multiple of 9.7.
Callaway’s current Market Cap is $5.31 billion with an EBITDA of $315.5 million; a multiple of 16.9.
TaylorMade’s valuation of $1.87 billion with a reported EBITDA of $200 million; a multiple of 9.4.
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Full Swing
Have you heard of Full Swing?
Full Swing is a sports visualization hardware and software company based out of San Diego, California. You can check out their awesome products here.
Full Swing announced a controlling interest investment from Bruin Capital on July 26th. Financial details weren’t disclosed, but it is rumored that Bruin Capital invested $160 million for a controlling stake in the company. Bruin purchased the controlling stake from private equity firm North Castle Partners, which will continue to have a minority stake in the company.
Full Swing was founded in 1986 and is a leader in the golf simulator industry. They boast customers such as the Golf Channel and Top Golf. Full Swing has a star-studded list of ambassadors.
Tiger Woods
Jordan Spieth
Jon Rahm
Steph Curry
Patrick Mahomes
Full Swing lists three different products; they aren’t necessarily cheap.
Sport Series Simulator - starting at $39,900
Pro Series Simulator - starting at $54,900
Virtual Putting Green - starting at $70,900.
Full Swing will be debuting a launch monitor in the future for just $3,999; they are taking deposits right now for pre-order. For reference, Trackman sells its launch monitor for $19,995. This will likely be a major emphasis in Full Swing’s strategy in the future as they look to gamify golf, similarly to how Peloton has gamified cycling.
Who is Bruin Capital?
Bruin Capital was founded in 2015 by George Pyne. Bruin has made several sports-related investments.
Deltatre
TGI
Two Circles
Engine Shop
Oddschecker
It will be interesting to follow these two acquisitions over the coming months and years to see how they both shape the game of golf!
Have yourself a Monday, talk to you next week!
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Starting to save now for a Full Swing. Love the idea of gamify golf!