adidas sells golf brand portfolio to KPS for $425m
Adidas has played its final shot on the 18th. The German athletic sportswear giant has agreed to sell its non-essential golf brands – TaylorMade, Adams Golf and Ashworth – to US private-equity firm KPS Capital Partners for $425m.
The sale to a newly formed unit of KPS is expected to be a mix of cash, secured note and continued considerations, according to adidas. It expects to complete the transaction by year-end.
The purchase of TaylorMade came just hours after the brand signed a 10-year, $100m sponsorship deal with top golfer Rory McIlroy that will see him using clubs, balls and bags from the brand. Earlier, he signed a major kit deal with Nike, worth around $200m.
In a statement, KPS managing partner David Shapiro said the firm is looking forward to working with TaylorMade “by driving growth both organically and through strategic acquisitions.”
A new dawn comes at a time when the sector is still in the doldrums, particularly in the US. TaylorMade and the accompanying subsidiary golf brands have been up for sale since last May and the downturn has seen sporting goods companies suffering several retail bankruptcies and liquidations.
But the fact that adidas’s main rival Nike is also exiting the golf equipment industry paves the way for major players such as TaylorMade to flourish in any upturn.
adidas CEO Kasper Rorsted said: “Within our long-term strategy ‘Creating the New’, our focus is clearly on our core competencies in footwear and apparel and on our two major brands adidas and Reebok.”
adidas also said it “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” in its 2017 results.