Just a day after Rory McIlroy signed with TaylorMade, the brand, along with Adams and Ashworth, were sold by Adidas to the USA private equity group KPS Partners. The deal is expected to close towards the end of 2017.
The German apparel giant first announced its plans to shop the units last May, and at the time said a sale of the golf equipment brands would allow it to focus on core offerings.
While Adidas has chose to stop making equipment, golfers will continue to wear the company logo on the golf course.
Although these three units account for 60 per cent of Adidas' total golf-related revenue, its golf unit's net sales for 2016 were $892 million, down by 1 per cent from $902 million in 2015.
KPS Capital, which manages about $5.3 billion in funds, typically seeks stakes in manufacturers and industrial firms.
The sale also included Ashworth, acquired in 2008 for $72.8 million, and Adams Golf, purchased for $70 million in 2012. As a result of the transaction, Adidas will record a non-operational negative P&L impact in the high-double-digit to low-triple-digit million euro range, which will be reported in discontinued operations as part of the company's 2017 results.
The deal is looks like a win-win for both parties.
"TaylorMade is is a leading global golf brand with an exceptionally strong market position", Kasper Rorsted, the group's chief executive officer, said. Guggenheim Securities acted as exclusive financial advisor to Adidas, while Sheppard Mullin Richter & Hampton served as legal counsel.
A day after Rory McIlroy signed a long-term deal with the company, TaylorMade is back in the news. The TaylorMade team is deeply committed to making the most technically advanced performance-driven golf equipment, and this mission will never change. All six are ranked in the top 12 in the world.
Adidas chipped out of the bunker today as it finally sold off its struggling golf brands to focus on footwear and sports clothing.