TaylorMade Purchases Nassau Golf

[JB]

This is a press release

TaylorMade Golf has completed the acquisition of Korean-based Nassau Golf Co. Ltd for an undisclosed amount. The deal represents TaylorMade’s third vertical integration in its golf ball business with the new entity called TM Golf Ball Korea, joining its other golf ball manufacturing facilities - TM Golf Ball South Carolina (US) and TM Golf Ball Taiwan (TaylorMade-Foremost Golf Co.).

With a growing golf ball global market share, including a 176% growth rate over the last 5 years*, this strategic acquisition further strengthens TaylorMade’s expansion in the golf ball category. It also enables the company to better service its global businesses who are all experiencing strong demand for its cast urethane TP5/TP5X and Tour Response models, as well as its ionomer cover models like Distance+.

Nassau Golf Co. Ltd has been part of TaylorMade’s golf ball supply chain for over 15 years, making urethane and ionomer balls, as well as mantles for TaylorMade’s TP5/TP5X facility in Liberty, South Carolina. This is also TaylorMade’s second major investment in golf ball manufacturing in the last 3 years following its joint venture with Foremost Golf Co. Ltd in 2019 forming – TM Golf Ball Taiwan.

 

[Mmaynard11]

Interesting I wonder what drove them to purchase Nassau as it appears they’ve been part of TM golf ball supply chain. Could it be because of Supply Chain issues that we are seeing globally these days?

 

[Daluteh]

That's very cool to see. I had asked about golf balls in another thread and market share because I thought I had heard it was a very low margin affair. Maybe owning the entire (or majority) of the supply chain will help increase that profit in the long run. It's not like golfers are all of a sudden going to lose less balls.

 

[hadi05]

Very interesting! Thanks for the news feed @JB!

 

[JB]

That's very cool to see. I had asked about golf balls in another thread and market share because I thought I had heard it was a very low margin affair. Maybe owning the entire (or majority) of the supply chain will help increase that profit in the long run. It's not like golfers are all of a sudden going to lose less balls.

It is definitely not a low margin affair. It is both solid margins as well as constant business. Bridgestone, Callaway and Titleist make nearly all of their premium balls in the states and control their supply chain.

 

[McLovin]

is this a play to try to get in front of the anticipated shortages for golf balls? more about ensuring production capacity than trying to add a new revenue source?

 

[annsguy]

Does TM purchase potentially shut out any competitors who also used Nassau to make balls.

 

[Daluteh]

It is definitely not a low margin affair. It is both solid margins as well as constant business. Bridgestone, Callaway and Titleist make nearly all of their premium balls in the states and control their supply chain.

Thanks for the correction. I thought I had heard it the other way. That's even better for a company if it's a high margin product and they control the whole supply chain. I'm not saying this will give them a competitive advantage but it can surely help.

Hopefully it doesn't impact Nassau much. Going from an influencer to an owner operator is a big step, based upon the release though this isn't new to them.

I hope they continue to do well.

 

[Templet0n]

Nassau makes a lot of balls for a lot of DTC companies. I wonder if they will continue to do so.

Will they just be paying TM to make them? Or will they have to find a new manufacturer? This is going to be a interesting change in the ball market.

 

[jdtox]

I knew Callaway Bridgestone and Titleist made their balls in the states but didn’t know TaylorMade did. If they have been part of their chain for that long I wonder why purchase now

 

[RealPretendPsychic]

Interesting. I know it’s not the main point, but if Callaway and TaylorMade are gaining market share, who is losing it?

 

[JB]

Nassau makes a lot of balls for a lot of DTC companies. I wonder if they will continue to do so.

Will they just be paying TM to make them? Or will they have to find a new manufacturer? This is going to be a interesting change in the ball market.

That is the million dollar question and I have asked someone about this very thing. Not sure as of uet.

I knew Callaway Bridgestone and Titleist made their balls in the states but didn’t know TaylorMade did. If they have been part of their chain for that long I wonder why purchase now

TaylorMade has a small ball plant in South Carolina (in comparison to Bridgestone, Titleist and Callaway) and it appears will continue to make most of their golf balls overseas with Nassau and Foremost.

 

[hadi05]

It is definitely not a low margin affair. It is both solid margins as well as constant business. Bridgestone, Callaway and Titleist make nearly all of their premium balls in the states and control their supply chain.

@JB not sure where the low margin stuff comes from. Maybe it's because we've seen ball mfg's go bankrupt?! Controlling your supply chain means you control your own destiny on how and how much your produce and your costs. If done right it leads to more marketshare!

 

[JB]

Interesting. I know it’s not the main point, but if Callaway and TaylorMade are gaining market share, who is losing it?

In the last year or so, Bridgestone has had share erode a bit, and was passed by Taylormade. We have that information in our Brand Story on Bridgestone where we talk about market share and what is and isn't included.

 

[Jman]

Nassau makes a lot of balls for a lot of DTC companies. I wonder if they will continue to do so.

Will they just be paying TM to make them? Or will they have to find a new manufacturer? This is going to be a interesting change in the ball market.

This is exactly where my mind went first. Does this begin to close out the D2C’s?

 

[Templet0n]

This is exactly where my mind went first. Does this begin to close out the D2C’s?

Will be very sad if it does. I am personally not a big user of DTC brands. But I like their existence.

 

[Jman]

Will be very sad if it does. I am personally not a big user of DTC brands. But I like their existence.

I’m mixed on it. There are those with their merit, like Cut and Vice, but then there are a bunch others just sort of in the way with randomly produced “premium” golf balls.

 

[73monte]

Might be wrong, but it seems TM might be trying to control the competition of either the DTC brands, or inexpensive store brands. Kirkland particularly comes to mind.

 

[JB]

Might be wrong, but it seems TM might be trying to control the competition of either the DTC brands, or inexpensive store brands. Kirkland particularly comes to mind.

Kirkland is not made by Nassau. Qingdao SM Parker makes their current ball. The same factory makes the Cut and I believe Snell.

 

[Jman]

Kirkland is not made by Nassau. Qingdao SM Parker makes their current ball. The same factory makes the Cut and I believe Snell.

This is good info to know. Based on that, this may cut out a few, but not a ton.

 

[Canadan]

Nassau makes a lot of balls for a lot of DTC companies. I wonder if they will continue to do so.

Will they just be paying TM to make them? Or will they have to find a new manufacturer? This is going to be a interesting change in the ball market.

I had this thought bounce around in my head, but you have to wonder if they'd close out that business considering they have to be making some decent money on it.

Reminds me of Swag and EP a bit.

 

[Nappy]

Wow - had no idea that they had used Nassau in the past. Very interesting. Wonder how this will affect the market going forward.

 

[Templet0n]

I had this thought bounce around in my head, but you have to wonder if they'd close out that business considering they have to be making some decent money on it.

Reminds me of Swag and EP a bit.

My thought is they meaning Nassau will continue to produce these DTC products. The profits will just go to Taylormade and their branded balls will take precedent.

Why kill that revenue stream? You will get a piece of every DTC ball produced. That’s just smart.

 

[Canadan]

My thought is they meaning Nassau will continue to produce these DTC products. The profits will just go to Taylormade and their branded balls will take precedent.

Why kill that revenue stream? You will get a piece of over DTC ball produced. That’s just smart.

Yep, stacking those... stacks hahahaha

It is super interesting that they remain comfortably overseas though.

 

[jfox789]

Super interesting. A lot of consolidation going on.