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Adidas sells TaylorMade to KPS Capital Partners for $425 million

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Adidas has sold its golf brands TaylorMade, Adams and Ashworth to New York City-based private equity firm KPS Capital Partners for $425 million. The athletic-apparel giant had been actively seeking a buyer for its golf brands since this time May 2016.

The news was announced in a press release, which stated that the sale will be “half … paid in cash with the remainder in a combination of secured note and contingent considerations.” Completion of the transaction is expected later this year.

“This is the beginning of an exciting new era for TaylorMade, and our entire management team is excited to partner with KPS in this next phase of our growth and continued development of our brands, business and people,” said David Abeles, Chief Executive Officer of TaylorMade. “The TaylorMade team is deeply committed to making the most technically advanced performance-driven golf equipment, and this mission will never change. Given their strategic vision, operational resources and significant access to capital, KPS is the ideal partner to help TaylorMade build upon its strong momentum.”

KPS is a private equity firm headquartered in New York City. The company says it “generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage.” It currently manages a family of investment funds worth approximately $5.3 billion. 

TaylorMade’s annual sales reached a peak of $1.7 billion in 2013, but the sales have slumped in recent years. An article published by the New York Post in February stated that TaylorMade annual sales had slipped to less than $500 million and that the Carlsbad California-based company was losing between $75-100 million each year.

“TaylorMade is one of the preeminent golf equipment brands worldwide, with leading-edge products that consistently provide consumers a distinct performance advantage over the competition,” said David Shapiro, a Managing Partner of KPS. “We look forward to working with Chief Executive Officer David Abeles, his management team and all TaylorMade employees around the world to build on this great platform by driving growth both organically and through strategic acquisitions. The combination of this iconic brand and KPS’ track record of working constructively with talented management teams to make businesses better will provide the ideal foundation for TaylorMade’s future growth.”

While TaylorMade’s sales have slowed, its presence on the PGA Tour has not. Yesterday, the company announced that it had signed Rory McIlroy to deal to use its golf clubs and golf ball. It now has endorsement deals with the top-3 golfers in the world: Dustin Johnson (No. 1), McIlroy (No. 2) and Jason Day (No. 3).

In January, TaylorMade also signed 14-time major champion Tiger Woods to an endorsement deal. The company also has a deal with one of the hottest young golfers on the PGA Tour, 22-year-old John Rahm.

Adidas said last year that it planned to continue to produce golf shoes and apparel even after the sale of TaylorMade, Adams and Ashworth, and the press release mentioned no change in Adidas’ strategy.

Related: See what GolfWRX Members are saying about TaylorMade’s sale in our forum. 

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28 Comments

28 Comments

  1. Darryl

    May 15, 2017 at 7:57 am

    TM signed Rory to deny Callaway the chance, if they hadn’t made an offer at least matching Callaways, he would have just signed for Callaway for the money and quietly put a disguised M2 in the bag, this way they get to shout it from the rooftops and damage Callaway all in one.

    Rory shifting to the M2 will badly damage the sales of the Epic. If DJ, JD and Rory are all using one driver it will sell like free intercourse.

    Callaway thought having Henrik and the prospect of Rory on the books would make the Epic a slam dunk best seller, but with Henrik off the boil (and still using his 3 wood a lot) and Rory deciding the TM product is better. That can’t be good for Callaway, so much so that I notice their Epic ad says that its the best selling driver of 2017 but has a very big visible disclaimer at the bottom saying “based on results from Jan – Mar 2017” so they clearly don’t think the Q2 numbers are going to be so good.

    What TM have wasted money on is signing Tiger. He’s unlikely to play a major role in tournament golf again, so new young players wont know him any better than I knew Hogan or Snead, a once great player, now just a name in the record books. With Nike not making equipment any more, the Tiger fanboys that insist on playing whatever their hero plays would have to switch anyway and that number will drop year on year with him out of the game anyway.

    Is this the final cycle of big money deals as golf settles into a post Tiger era? It’s unlikely any of the new crop of superstars will dominate as he did, so is it worth tying them down to 10 year $100M+ deals? 4 years ago everyone thought Rory was the heir apparent and would challenge the Major tallys of both Woods and Nicklaus, not so. 2 years ago everyone thought Speith was the T-Rex and would rule for a thousand years, not so. 18 months ago it was Jason Day, 12 Months ago DJ, 6 months ago Justin Thomas. But they all look like they will settle into a nice routine of 6 months each at the top and then a rest. That isn’t worth $10m a year.

  2. Don Greco

    May 12, 2017 at 6:32 pm

    Love the press release; makes it sound like the world’s greatest golf manufacturing company….just pay no attention that is was sold at a firesale price. There are only so many golfers out there…..it’s a niche game, always will be. Mass marketing just not a good fit for the golf industry. ….there aren’t enough players who need new gear as frequently as the manufacturers had hoped. Every “grow the game” article in any golf magazine is really a marketing pitch for new customers.

  3. munchies

    May 11, 2017 at 8:02 pm

    Three steps to black – 1. stop paying ridiculous endorsement fees to tour players, drop few of them 2. cut off management 3. stop dropping bucket loads in marketing, focus in quality offering…

  4. David Ables

    May 11, 2017 at 12:32 pm

    Peace out guys. I’m off to run Adidas South America. Just like Mark King flooded the golf market then got a promo with Adi NA!

  5. M-Herd4

    May 11, 2017 at 9:54 am

    Why would a struggling company like TM sign Rory to a $100M contract when the entire company itself is only valued at $425M?? They already have a stable of elite players that haven’t helped their financial health significantly…

    • Forsbrand

      May 11, 2017 at 4:24 pm

      Could Rory himself along with Tiger be part of the investment?

    • munchies

      May 11, 2017 at 9:23 pm

      I know unbelievable. Wouldn’t there be a point of diminishing returns? You have DJ and Tiger on the book already, would adding Rory will increase the club sales proportionally? I would venture to say no..

    • Tom1

      May 12, 2017 at 10:47 am

      100 mil, I searched and couldn’t find that info….?

  6. rebfan73

    May 11, 2017 at 7:21 am

    Or WWE….

  7. Mat

    May 11, 2017 at 5:57 am

    Here’s to hoping they break the release cycle madness. It is good IP, but the lack of price strength hurts the premium margins. And back off the damn lofts. 🙂

  8. Craig

    May 11, 2017 at 4:47 am

    Good to see the keyboard warriors at it again. A quick bit of research on the JPS website will actually show they have a history of INVESTING in companies by improving and streamlining supply chain and manufacturing and growing their investments . Could mean Taylormade might actually improve on delivery and custom build times!!! Time will tell

  9. Simms

    May 10, 2017 at 10:56 pm

    Darn, I was hoping Ashworth would buy back his name and we could have some descent fitting quality golf shirts again…..

    • MMM

      May 11, 2017 at 10:56 am

      You should look at LinkSoul……that’s the company John Ashworth started after he got bought out.

  10. alan

    May 10, 2017 at 9:43 pm

    as long as my next taylormade driver is 14 yards longer than the one i bought 6 months ago i dont care who owns taylormade.

  11. toyzrx

    May 10, 2017 at 7:13 pm

    Nothing in economy suggests that investment into golf anything is money well spent. I see more layoffs and budget tightening coming to TM. I was hoping TM be bought by another big sport OEM, or merge with Callaway or Titleist.

  12. jc

    May 10, 2017 at 5:33 pm

    now they will have to come out with a new driver every 4 months instead of every 6 months. And it will go 5 yards father of course.

  13. Scott

    May 10, 2017 at 5:32 pm

    Yawn

  14. IH

    May 10, 2017 at 5:05 pm

    I thought the amount would be biggerer lol

  15. Adrien Jenot

    May 10, 2017 at 4:55 pm

    I bet they stop making new clubs every year now… (structurally improving the strategic position, competitiveness and profitability of its portfolio companies) I for one am glad the golf market is going back to reality. It reminds me of a recent crash lol

  16. golfraven

    May 10, 2017 at 4:55 pm

    Does Rory need to worry about his next paycheque? Doubtful!

  17. Jeb Springfield

    May 10, 2017 at 4:27 pm

    Fairly sure if you use he “word” “prolly,” you’re not clearing $25M.

    • NolanMBA

      May 10, 2017 at 4:31 pm

      That Facebook creator wears hoodies to board meetings…

  18. Orvill

    May 10, 2017 at 4:21 pm

    Heck…. I wuldn’ta paid more than $375 Mill for TM….. and then sold it off in chunks ….. drivers… irons… putters… balls… bags… and prolly cleared $400 Mill with $25 Mill profit …. and then flipped off Ashworth and Adams ….!!

  19. Joe

    May 10, 2017 at 3:24 pm

    No luck involved, the signing of Rory was most likely part of whatever deal they came to. Once a Private Equity firm takes hold it’s all down hill……

  20. TCJ

    May 10, 2017 at 3:19 pm

    First!

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Tour Photo Galleries

Photos from the 2021 Barbasol Championship

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GolfWRX was live on site at the Barbasol Championship in Keene Trace Golf Club in Nicholasville, Kentucky.

We have 13 general galleries for you to peruse as well as in-hand photos of the new Callaway Jaws Full Toe wedges and more.

General galleries

Tuesday

Wednesday

Special galleries

 

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Tour Photo Galleries

Photos from the TPC Colorado Championship (Korn Ferry Tour)

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GolfWRX is live this week from the Korn Ferry Tour’s TPC Colorado Championship from Heron Lakes in (not surprisingly) Colorado.

We have 11 galleries for you to peruse as well as in-hand looks at the new Titleist T200 irons.

Check out all our photos below.

Titleist T200 2& 3 irons – 2021 TPC Colorado Championship @ Heron Lakes

See what GolfWRXers are saying and join the discussion in the forums. 

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Equipment

Rocket Mortgage Classic Tour Truck Report: T200 in the wild, Jimmy’s custom irons, Phil’s proto hybrid, proto Jaws wedge

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Detroit Golf Club, a mere 15 miles from GolfWRX HQ, plays host to this week’s PGA Tour event, the Rocket Mortgage Classic.

Overall, it was a slow week as we are in the heart of the tour schedule. New product (for the most part) isn’t being released, and The Open is in two weeks — a tournament during which many players will make adjustments for the links layout they’ll face. Ultimately, it’s a “dance with the one who brung you” affair at the RMC. The notable exception is in the Titleist camp where T100 and T200 seeding began last week, and the irons are seeing rapid adoption.

Let’s check out the storylines among the craftsmen and their tools.

Titleist

Here’s a first look at the new Titleist T200 4-iron (in Charles Howell III’s bag).

Jimmy Walker’s prototype black finish T100, 620 MB irons.

Charles Howell III is putting new T100 irons in play. He loves the look and turf interaction, according to Titleist.

Rafa Campos is moving from 620 MB to new T100S irons. He likes the combination of speed and feel.

Following a range session, Troy Merritt is putting a combo set of new T200 and T100 irons in the bag.

Hank Lebioda put new T100 irons in last week (en route to his best finish — T5 — of the year). Loves the flight and workability, according to Titleist.

Mark Hubbard is seeing increased workability with a new T200 4-iron versus his previous U500 4i.

Ben An is testing new T200 4- and 5-irons.

Cam Davis is testing a new T100 3-iron.

Robert Streb is moving from a 718 TMB 4-iron to a new T100S.

Sean O’Hair has new T100 irons in play: “They look and feel like a blade and give me the confidence of a cavity back iron,” he said. O’Hair is also moving from TSi3 10-degree driver in B1 setting to TSi4 10-degree driver in A1 setting. Increased launch, lower spin, easier to draw.

Roger Sloan moving from U500 4-iron to a new T100S 4-iron.

Richy Werenski has new T100 3, 4 and 5-irons in play.

Ben Taylor is replacing his current T100 4-iron with the new model.

Mark Anderson is putting new T100 irons in play as does Tyler Duncan.

On the non-T100/200 front: Tom Hoge is moving from a TSi2 (9-degrees) driver with Fujikura Ventus Blue 6 X to TSi3 (9 degrees) with Ventus Black 6 X.

Ben Martin switched to Pro V1x Left Dash.

Callaway

Prototype Jaws wedges spotted! Callaway is mum on details.

Phil Mickelson is in a prototype hybrid, as he revealed on his Instagram. No details from Callaway other than that a few players are testing. Mickelson’s hybrid features a Fujikura Ventus Red 9 X shaft.

 

View this post on Instagram

 

A post shared by Phil Mickelson (@philmickelson)


Kevin Kisner, who has been in a GBB since time out of mind, is testing a Callaway Epic Max LS with a Fujikura Ventus Black 6 X shaft.

Chris Kirk had the leading edges of his irons ground down for better turf interaction.

TaylorMade

Updates to follow. Stay tuned!

Others

Russell Know is testing a Graphite Design Tour AD GP 6 X in his driver.

William McGirt is testing a Graphite Design our AD DI 6 X in his driver.

Garrick Higgo and Robert Streb are both testing Fujikura Ventus HB shafts in Titleist T200 driving irons.

Patrick Reed is testing Bang Energy as he continues his search for an early morning boost.

Check out all our photos from the Rocket Mortgage Classic, and see what GolfWRXers are saying in the forums.

 

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