Acushnet Company, parent company of Titleist and Footjoy, has begun talking to banks about a potential IPO in the U.S., reports Bloomberg Business.
The Stock Offering Would Be Scheduled for 2016.
Acushnet is fielding offers from multiple banks for the IPO. Bloomberg’s unnamed sources say the company could be valued at approximately $2 billion. This is a significant increase from the $1.8 billion valuation we reported in January of this year (signs of the industry turning around or simply a matter of rounding up?) when we first heard talk of the company going public.
Fila Korea Ltd. purchased Acushnet in 2011 for $1.23 billion with plans to spinoff the company. Since then, earnings have increased to $185 million from $120 million in 2011.
But What About The Timing?
News of golf’s demise is everywhere. Golf is dead, right? The story goes like this: the Baby Boomers are putting away their clubs for good, the middle-aged golfers gave up the game during The Great Recession, and Millennials aren’t picking up the game because it takes too long.
Adidas’ golf unit sales have dropped over 30% over the last two years and reports say they are looking to sell their golf brands, including Taylormade.
Golf courses across the country are closing and virtually no new courses are opening. Even my home course is looking to sell off 18 of their 36 holes.
So, Is Fila Korea Cashing Out Before The Death Rattle?
We say no, and not just because we’re primarily a golf website. Look at Acushnet’s earnings; they’ve increased over 50% since Fila took over. Callaway stock is collecting buy recommendations from market analysts and the company has taken over as #1 in sales of irons, hybrids, and fairway woods. Look at the excellent 2015 PGA Tour season that just ended and the youth movement responsible for ratings increases upwards of 20%.
The golf equipment business is still an $8.7 billion industry and Acushnet holds the #1 brand in golf ball (Titleist) and the #1 shoe (FootJoy). If the golf market has already bottomed out, the timing of this IPO will be anything but poor. Acushnet will be well positioned in a stabilized golf industry with some of the most well-respected brands in the game.
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