As Rory McIlroy, Scottie Scheffler and Tommy Fleetwood start their pursuit of the PGA Championship at Quail Hollow, more under the radar is the fact that their endorsement cheques from one of the biggest equipment manufacturers on the planet might soon have a different signature on them.
RELATED: Can TaylorMade’s Qi35 ‘core’ driver top last year’s Qi10? We let a robot decide
According to the Korean Economic Daily, Centroid Investment Partners, a South Korean private equity firm that has owned a controlling interest in TaylorMade since 2021, has confirmed plans to divest its stake in the equipment giant, opting for an outright sale over an initial public offering. The asking price is reportedly $US3.5 billion ($5.4b).
According to the report, the decision was reached after a review by JP Morgan and Jeffries. “We conducted a thorough analysis of various monetisation strategies and concluded that a stake sale provides a more favourable risk-return profile for our limited partners, compared to an IPO,” said a Centroid official. Centroid acquired TaylorMade for $US1.7 billion in 2021.
But the divestiture plan may not be that straightforward. A crucial part of Centroid’s ownership of TaylorMade was the investment of the Korean fashion conglomerate F&F. F&F added a reported $392 million investment to shore up Centroid’s finances for the original purchase price, or more than 23 percent. A report in Korea’s Chosun Daily indicates F&F believes it has first right of refusal on any potential sale – and has consistently opposed a sale in favour of a future IPO.
RELATED: TaylorMade makes Rory McIlroy’s RORS proto irons available to everyday players
Centroid officials maintains that F&F’s control over those specific decisions is limited. According to the paper, “Industry observers note that F&F’s most likely route to securing control may be through the fund’s liquidation, at which point it could receive shares directly.”
Like most major companies, TaylorMade has enjoyed significant growth over the past five years, reaping the benefits of the post-pandemic golf boom. According to the report, TaylorMade has posted an average annual growth rate of more than 10 percent in net sales and more than 15 percent in earnings before interest, tax, depreciation and amortisation (EBITDA) over the past five years, making it an attractive property.
Adding to the lure is the company’s affiliation with Tiger Woods and the launch of the Sun Day Red apparel line. As well, several of the top players in the world are affiliated with the brand, including Scheffler, McIlroy, Nelly Korda and Collin Morikawa. Whether the eventual purchaser is an investor or strategic partner, one of the golf industry’s crown jewels is now on the. market and certain to draw plenty of attention.
