Adidas has agreed to sell TaylorMade Golf to a newly formed affiliate of KPS Capital Partners, LP for $425 million today.
The New York-based KPS Capital Partners manages $5.3 billion in global assets in manufacturing and industrial companies, including automotive parts and electrical components.
About half of the $425 million will be paid in cash, while the remaining portion will be paid in the form of a secured note and contingent considerations. The final sale is expected to be completed in late 2017.
“TaylorMade is a leading global golf brand with an exceptionally strong market position,” said Kasper Rorsted, CEO of Adidas AG in a release. “We would like to thank all TaylorMade employees for their many contributions to our company and wish them all the best for a successful future under their new ownership.”
“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,” Rorsted added.
TaylorMade was founded in 1979 by golf equipment salesman Gary Adams with a focus on metalwoods, and the brand was purchased by Adidas in 1998.
Adidas reported that TaylorMade’s first-quarter 2017 net sales were $294 million, up 4 percent on a currency-neutral basis year over year and with a greater product margin, but that Adams and Ashworth were drags on the golf unit. The golf unit’s net sales for 2016 were $892 million, down 1 percent from $902 million in 2015.
Despite uncertainty over an impending sale, TaylorMade has been busy signing premier golfers to endorsement contracts. Since intentions to sell were announced last May, the company re-signed Jason Day and Dustin Johnson to contract extensions, and on Tuesday announced the addition of Rory McIlroy for an estimated $100m ten year deal.