KPS Capital Partners has announced that it has signed a definitive agreement to sell TaylorMade Golf to Centroid Investment Partners, a private equity firm based in Seoul. The financial terms of the transaction have not been disclosed, but the price of the acquisition has been set at 1.8 trillion Korean won (€1.3bn-$1.5bn), according to The Korea Economic Daily, resulting in a major capital gain. KPS acquired TaylorMade from Adidas in 2017 for $425 million.
TaylorMade was losing money at the time, but KPS says that TaylorMade increased its profitability in each of the past three years, following investments in new manufacturing technologies, a revamped marketing strategy and a state-of-the-art e-commerce platform. Centroid said it plans to accelerate the brand’s growth, especially in South Korea, where golf is booming, and the rest of Asia.
Centroid’s founder and chief executive, Jinhyeok Jeong, defined the acquisition of TaylorMade as “a transformational investment” in an industry that is currently experiencing high demand and increased participation in Asia. Korea is the third-argest golf market after the U.S. and Japan, Centroid noted, adding that increasing participation in Korea has been driven since the 2010s by the influence of screen golf and new participation by younger generations and women.
Centroid’s investment reminds of the acquisition of Acushnet by Fila Korea in 2011 for more than $1.2 billion, with the indirect backing of Samsung. First established in 2015, Centroid has a track record of strategic buyout transactions in Korea across a diverse set of industries. Its most recent purchases include the South Springs Country Club, Kolon Advance Fiber, and Woongjin Booxen.
The new owners will retain TaylorMade’s current senior management, led by David Abeles and based in Carlsbad, California. The company was founded in 1979, launching the first metalwoods in the market. It was bought by Salomon in 1984 to build up a counter-seasonal business to balance its core snow sports equipment operations. Adidas bought the combined entity in 1997 but sold Salomon to Amer Sports in 2005 and then divested TaylorMade in 2017, just after Nike stopped offering its own golf equipment.
The completion of the transaction is expected later this year, subject to customary closing conditions and approvals. Paul Weiss, Rifkind, Wharton & Garrison served as legal counsel and Morgan Stanley and Allen & Co. served as financial advisors to KPS and TaylorMade. DLA Piper and Kim & Chang served as legal counsel to Centroid, and KPMG, Bain and Company, and Caple Advisory acted as advisors to Centroid.