Adams Golf’s Brewer Says Sale, Dividend Among Strategic Options

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Bloomberg Buisness Report today By: Matt Townsend.

Adams Golf Inc., the golf club seller that today said it hired Morgan Stanley to review strategic alternatives, may consider among its options a sale or starting a dividend, Chief Executive Officer Chip Brewer said.

Potential suitors for Plano, Texas-based Adams include Callaway Golf Co., Nike Inc. and Adidas AG, said a person familiar with the matter, who declined to be identified because the discussions are private.

Adams Golf, founded by Chairman Barney H. Adams in 1987, boosted sales 14 percent to $97.4 million in the 12 months ended Sept. 30. After posting a net loss of $12.2 million in 2009, the company has made money in six of the past seven quarters. The shares, which gained 37 percent last year, rose 4.3 percent after the close to $6.58 at 6:32 p.m. in New York.

“We are going to go through with a process that best helps shareholder value,”

Brewer said today in a telephone interview.

Morgan Stanley, based in New York, advised Fortune Brands Inc. last year on the sale of its Titleist golf unit to a group led by Fila Korea Ltd. for $1.23 billion in cash.

The review may not result in a transaction, Adams said today in a statement.

Click here to read entire article on bloomberg… http://www.businessweek.com/news/2012-01-05/adams-golf-s-brewer-says-sale-dividend-among-strategic-options.html

According to a thread on GolfWRX one writer says:

Who’s buying Adams? I’m guessing Under Armour. Golfbiz is reporting Adams is for sale. My question is who’s the players? Under Armour was a rumor on Titleist/Acushnet, could they be interested in Adams now, who’s gotta be cheaper that the Titleist acquisition. Ideas?

On GolfWRX reader are all over this. Suitors have been picked. Click here to read discussion in the forums… http://www.golfwrx.com/forums/topic/564999-whos-buying-adams-im-guessing-under-armour/

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2 Comments

1. 

   r8ted wrx

   January 6, 2012 at 4:43 pm

   I would like to see Adams succeed but if not then I believe Nike needs to go after them. It would make Nike that much better and able to compete more with Taylormade and Titleist.

   Reply
2. 

   Adams Golfer

   January 6, 2012 at 4:55 pm

   As a shareholder of Adams Golf, I’m excited that Chip has finally looked at this route. There is no reason for this company to be public, and a take private or a sale to a strategic is exactly what is needed to unlock shareholder value. With Callaway trading at 13.8x EV/EBITDA, it looks like Adams should go for a pretty penny.

   Reply