TaylorMade Golf Sold!

Josh Babbitt May 11, 2021 70 Comments

TaylorMade Golf Company, Inc. announced today that its current financial sponsor, KPS Capital Partners has signed a definitive agreement, through an affiliate, to sell TaylorMade Golf Company, Inc., to Centroid Investment Partners, a Seoul, Korea based private equity firm. Financial terms of the transaction were not disclosed.

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Josh Babbitt

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Josh is the Publisher of The Hackers Paradise and co-founder of THP Media with his wife Morgan Babbitt. Together they share a passion for golf, and they travel the country in the THP Tour Van bringing their love and knowledge of the game to golfers everywhere.

70 Comments

ddec says:

May 11, 2021 at 9:08 am

What do we know about this Centroid group?
baylrballa says:

May 11, 2021 at 9:08 am

despite all the star power under contract, I haven’t been the least bit intrigued by any taylormade stuff in awhile. Interesting to see if anything changes.
MattyD-MPLS says:

May 11, 2021 at 9:08 am

I wonder if we will see TMade sponsor some of the best woman in the world because of this move.
NVGOLFER80 says:

May 11, 2021 at 9:09 am

Interesting. Will be very interesting to see where they go from here.. investment groups could be very hands off and let them run or totally micromanage them..
NVGOLFER80 says:

May 11, 2021 at 9:10 am

[QUOTE=”baylrballa, post: 9929549, member: 52381″]
despite all the star power under contract, I haven’t been the least bit intrigued by any taylormade stuff in awhile. Interesting to see if anything changes.
[/QUOTE]

the sim stuff is really good. The MC irons are as good as any other players cavity. Putters and wedges are meh..
smgoldstein says:

May 11, 2021 at 9:16 am

TM being passed around from one PE firm to another.
Nerdy_81 says:

May 11, 2021 at 9:19 am

I’ve always liked their woods, but irons have never done much for me in terms of looks. Curious to see what the future holds.
Golfers Anonymous says:

May 11, 2021 at 9:24 am

Wonder if this will lead to a sort of involvement like TE on the Champions Tour on the ladies side as most of there top players are from Korea. Hope at some point the hot potato will stop and they will stay with a single parent group or stand alone.
NVGOLFER80 says:

May 11, 2021 at 9:26 am

The [I]New York Times[/I] reported Tuesday that KPS Capital Partners wants to sell TaylorMade Golf, which it acquired in 2017 from Adidas for $425 million
tequila4kapp says:

May 11, 2021 at 9:30 am

Is this an equity group to equity group transaction? Is that common?
mancest says:

May 11, 2021 at 9:30 am

Cool, I have been very impressed with the P irons and the Sim line has been very good. Haven’t tested the sim 2, but would imagine it is solid. Just surprising that it is to another private equity group….
Scorpion12 says:

May 11, 2021 at 9:31 am

Interesting. I hope it works well for TM. I don’t want them to fail.
Scooby45 says:

May 11, 2021 at 9:34 am

I really liked the look of the P770…
MONTANTK says:

May 11, 2021 at 9:35 am

[QUOTE=”baylrballa, post: 9929549, member: 52381″]
despite all the star power under contract, I haven’t been the least bit intrigued by any taylormade stuff in awhile. Interesting to see if anything changes.
[/QUOTE]
The Sim2 woods are very good imo. I stepped away from them for a while because I wasn’t a fan. I really hope their iron game improves though. I hit the P7MCs a few months ago and thought they felt terrible. I like my P760s but the distances are very inconsistent which I heard is similar for the P770s
OldandStiff says:

May 11, 2021 at 9:35 am

[QUOTE=”NVGOLFER80, post: 9929557, member: 53139″]
the sim stuff is really good. The MC irons are as good as any other players cavity.
[/QUOTE]

Better than imo. TM doesn’t get a lot of love here, but they have plenty of good products out.
JB says:

May 11, 2021 at 9:35 am

[QUOTE=”tequila4kapp, post: 9929587, member: 9704″]
Is this an equity group to equity group transaction? Is that common?
[/QUOTE]
Both? 🙂
Canadan says:

May 11, 2021 at 9:38 am

I just want to see TaylorMade get it all right.

If this moves that needle in a positive way, I’m thrilled.
NVGOLFER80 says:

May 11, 2021 at 9:39 am

[QUOTE=”OldandStiff, post: 9929600, member: 53737″]
Better than imo. TM doesn’t get a lot of love here, but they have plenty of good products out.
[/QUOTE]

Their players irons are great. The woods are great. I think they only lack in the putter and wedge areas.
SkiBumGolfer says:

May 11, 2021 at 9:40 am

I think their gear of late has looked quite good, and the star power certainly doesn’t hurt – those guys seem pretty happy. Hopefully this goes well for them. I think of TM and Callaway as the hardgoods equivalent of “too big to fail”, but I guess no one is really big enough in golf for that to be true.
Tywithay says:

May 11, 2021 at 9:41 am

[QUOTE=”NVGOLFER80, post: 9929584, member: 53139″]
The [I]New York Times[/I] reported Tuesday that KPS Capital Partners wants to sell TaylorMade Golf, which it acquired in 2017 from Adidas for $425 million
[/QUOTE]
This year has been extremely successful for the golf industry, so this move makes sense. Buy low, sell high. Be interesting to see what Centroid has in the cards.
Snickerdog says:

May 11, 2021 at 9:43 am

Has to be a lot of $$’s for sure.
jdtox says:

May 11, 2021 at 10:03 am

What is it about TaylorMade that seems like they have been sold several times in the last few years?
dacatalyst41 says:

May 11, 2021 at 10:06 am

I hope they find some stability and this works out in the long run. They’ve had a stellar run the last couple of years and I hope it continues.
MattyD-MPLS says:

May 11, 2021 at 10:06 am

[QUOTE=”jdtox, post: 9929631, member: 5944″]
What is it about TaylorMade that seems like they have been sold several times in the last few years?
[/QUOTE]

They have right? Adidas sold them to the company that sold them to this crew.
Golfever says:

May 11, 2021 at 10:28 am

[QUOTE=”Snickerdog, post: 9929616, member: 38739″]
Has to be a lot of $$’s for sure.
[/QUOTE]
[ATTACH type=”full”]9007372[/ATTACH]
NVGOLFER80 says:

May 11, 2021 at 10:45 am

[QUOTE=”Golfever, post: 9929656, member: 11044″]
[ATTACH type=”full” alt=”1620746889734.png”]9007372[/ATTACH]
[/QUOTE]

I am not sure this is a good deal for the buyer… Dang thats high..
Jaw2000 says:

May 11, 2021 at 10:49 am

[QUOTE=”Golfever, post: 9929656, member: 11044″]
[ATTACH=full]9007372[/ATTACH]
[/QUOTE]
If this is accurate, it makes one wonder what Adidas missed when selling just a few years ago for ~1/5 th that amount.

Perhaps value is way over inflated due COVID sales?. Which could flatten soon after the summer?. Just guessing
Reframmellator says:

May 11, 2021 at 10:50 am

[QUOTE=”tequila4kapp, post: 9929587, member: 9704″]
Is this an equity group to equity group transaction? Is that common?
[/QUOTE]

It is not uncommon. Changes in ownership happen a lot, especially if the companies are highly leveraged and capital infusions are required. Some private equity firms are more strategically focused than the flippers. Centroid appears to be one of the former, with a few investments in the golf space. The Centroid CEO used the phrase “long-term opportunities” to describe the acquiaition in a press release. They’ve only been around since 2015, so there isn’t much of a tracvk record to suggest that they are predominantly flippers or buy-and-hold. Keep in mind this is a gross generalization, but my limited experience with private equity ownership of larger (post-startup) companies suggests that Korean PE firms tend to have a longer term focus than their US counterparts.

Did anyone else hear the rumor that Centroid offered $450 million for TM, or $420 million including the Truss putter line?

EDIT – I just saw the $1.7 B number floating out there. That obviously excludes the Truss line.
Snickerdog says:

May 11, 2021 at 10:58 am

[QUOTE=”NVGOLFER80, post: 9929667, member: 53139″]
I am not sure this is a good deal for the buyer… Dang thats high..
[/QUOTE]
I was stationed in Korea once, they love golf in that country. So this doesn’t really surprise me.
Hacker Rod says:

May 11, 2021 at 11:04 am

Time will tell if this is good news. The new owners could leave the brand alone, or if we’re lucky they’ll make a major investment in the brand (R&D, not just marketing). The other option is for the new owners to make dramatic cuts in all areas, attempting to improve short-term profits to make the brand more appear more valuable to potential new owners. In my experience working for a company that had been flipped multiple times in a relatively short period, the latter was the common formula. Thee first PE buyer thought they could leverage the brand names to overcome the cheaper, lower quality products they were putting out. By the time sales were impacted, the company was on to another owner. Upon realizing there were problems that didn’t show up in the balance sheet, the new owner had no choice but to continue the cost-cutting measures. And so the cycle continued until the once industry gold standard became a laughing stock.

Given the price paid here, I’m hoping Centroid is in it for the long haul. ?
mulegolf says:

May 11, 2021 at 11:23 am

I guess I’m different than most of you. I’ve always liked Taylor Made clubs, though I’ve never owned any of their irons. I’ve got some of their woods and a putter. I like them both. The only problem I’ve ever had is with their outlandish claims in their advertising, such as, “17 more yards” and their leading the way to overcharge for their clubs, the drivers in particular.
GraniteRoost says:

May 11, 2021 at 11:42 am

[QUOTE=”Reframmellator, post: 9929677, member: 39508″]
It is not uncommon. Changes in ownership happen a lot, especially if the companies are highly leveraged and capital infusions are required. Some private equity firms are more strategically focused than the flippers. Centroid appears to be one of the former, with a few investments in the golf space. The Centroid CEO used the phrase “long-term opportunities” to describe the acquiaition in a press release. They’ve only been around since 2015, so there isn’t much of a tracvk record to suggest that they are predominantly flippers or buy-and-hold. Keep in mind this is a gross generalization, but my limited experience with private equity ownership of larger (post-startup) companies suggests that Korean PE firms tend to have a longer term focus than their US counterparts.

Did anyone else hear the rumor that Centroid offered $450 million for TM, or $420 million including the Truss putter line?

EDIT – I just saw the $1.7 B number floating out there. That obviously excludes the Truss line.
[/QUOTE]

What do you think they’d have to pay to get Truss thrown in? Double? ?
GraniteRoost says:

May 11, 2021 at 11:47 am

KPS Capital partners bought TM in 2017 for $425M, now sold 4 years later for a 4x multiplier. Damn. I need some of those multipliers in my life.
DataDude says:

May 11, 2021 at 12:09 pm

[QUOTE=”MattyD-MPLS, post: 9929639, member: 51852″]
They have right? Adidas sold them to the company that sold them to this crew.
[/QUOTE]
Also Adidas didn’t own them terribly long either LOL!
annsguy says:

May 11, 2021 at 12:56 pm

It seems like the brand is getting passed around so each time the equity group makes some quick cash or sheds a losing brand. I hope it finds a partner that cares about R&D or this will run out of steam.

I was staring into players bags at the Wells Fargo last weekend and the TM stuff looked awesome. But the days of the battle between they and Cally are over it seems.
Gman79 says:

May 11, 2021 at 1:19 pm

[QUOTE=”tequila4kapp, post: 9929587, member: 9704″]
Is this an equity group to equity group transaction? Is that common?
[/QUOTE]

Just the nature of the beast. Equity owned, made money and got a good multiple over the purchase price based on good business the last 4 years. PE owners trade companies every 4-6 years, so this is expected especially given today’s multiples. Doubtful much changes here given the strengths of the company.
Greg Kulbick says:

May 11, 2021 at 1:23 pm

[QUOTE=”GraniteRoost, post: 9929772, member: 40185″]
KPS Capital partners bought TM in 2017 for $425M, now sold 4 years later for a 4x multiplier. Damn. I need some of those multipliers in my life.
[/QUOTE]
The used car market is pretty hot right now…
nicklongdrive says:

May 11, 2021 at 1:24 pm

[QUOTE=”NVGOLFER80, post: 9929557, member: 53139″]
the sim stuff is really good. The MC irons are as good as any other players cavity. Putters and wedges are meh..
[/QUOTE]

Agreed, if you haven’t tried SIM 2 drivers/fairways or P series irons you are doing yourself a disservice. I thought I was going to be walking out of the fitter with a set of Titleists or Mizunos but the P770s struck the perfect balance of feel and forgiveness that I didn’t get in other sets. I also was not a fan of the ’21 Apex line and people love those, so I could just be an outlier.
GraniteRoost says:

May 11, 2021 at 1:25 pm

[QUOTE=”Greg Kulbick, post: 9929892, member: 15014″]
The used car market is pretty hot right now…
[/QUOTE]

Or Tesla stock over the last year ?

I’m doing it wrong….
HITitHIGH says:

May 11, 2021 at 1:38 pm

[QUOTE=”NVGOLFER80, post: 9929607, member: 53139″]
Their players irons are great. The woods are great. I think they only lack in the putter and wedge areas.
[/QUOTE]
The different kinds and variations of Spyder putters are all over the PGA and Korn ferry tours.
YukonLiving says:

May 11, 2021 at 1:38 pm

I thought I read speculation that this was in the works some time ago… so not overly surprising. Be interesting to see which strategy they take, and how quickly we start to see changes (if any). Personally, I thought TM was starting to get on track with their products, for the most part. Perhaps the sale price is indicative of that fact.

Also hard to overlook the star power TM carries!
NVGOLFER80 says:

May 11, 2021 at 1:47 pm

[QUOTE=”HITitHIGH, post: 9929907, member: 41839″]
The different kinds and variations of Spyder putters are all over the PGA and Korn ferry tours.
[/QUOTE]

sure super popular. The spider is an iconic shape at this point.
Agent Jay says:

May 11, 2021 at 2:03 pm

If it’s true they sold for over a billion dollars, that’s a huge return. With that said, could it be that this Korean company has a plan to make TM the biggest golf OWM in the Asia market place. If so, maybe they got a good deal?
Vortex says:

May 11, 2021 at 2:55 pm

The 2020 revenue estimate for TaylorMade is $875M. $1.7B is a 2x multiple on sales. It would be interesting to see their balance sheet as this would provide a better indication of the companies value.

I work for a company that went through two rounds of PE before landing in a good spot. PE firms are ruthless (in my opinion) but they’re willing to make tough decisions.
AnthonyC says:

May 11, 2021 at 2:56 pm

Maybe they will show up to the PGA equipment show now.
JB says:

May 11, 2021 at 2:58 pm

[QUOTE=”AnthonyC, post: 9929991, member: 53038″]
Maybe they will show up to the PGA equipment show now.
[/QUOTE]
I wouldn’t count on it, unless leadership changes, but ya never know
Gman79 says:

May 11, 2021 at 3:10 pm

[QUOTE=”Vortex, post: 9929990, member: 36098″]
The 2020 revenue estimate for TaylorMade is $875M. $1.7B is a 2x multiple on sales. It would be interesting to see their balance sheet as this would provide a better indication of the companies value.

I work for a company that went through two rounds of PE before landing in a good spot. PE firms are ruthless (in my opinion) but they’re willing to make tough decisions.
[/QUOTE]

two types of PE – Bleed em’ dry and strap em with debt or build the business and identify opportunities.
Tenputt says:

May 11, 2021 at 5:03 pm

I read that Fila purchased Acushnet in 2011 for $1.225 billion, which doesn’t make a price approaching $2 billion seem outrageous. I also read that Morgan Stanley was running the sale and had placed a $2 billion valuation on TaylorMade. I don’t know much of the history, but it sure makes me wonder why Adidas sold TaylorMade four years ago for $425 million.
6ixOhFore says:

May 11, 2021 at 5:18 pm

Hope it improved their products. The last well made Taylormade equipment was the r9 which was moons ago
Tenputt says:

May 11, 2021 at 5:23 pm

[QUOTE=”6ixOhFore, post: 9930122, member: 20252″]
Hope it improved their products. The last well made Taylormade equipment was the r9 which was moons ago
[/QUOTE]
I honestly don’t get some of the negativity towards TaylorMade. I have two SIM2 fairways in the bag right now. They are incredible. A lot of people still talk about how good of a head the M2 was. I am still seeing P790 irons in a lot of bags in my area. The Spider putter has reached almost iconic level. I tested quite a few balls and the TaylorMade is what I have decided to play for the year. Year after year, TaylorMade is near the top in driver sales. The list goes on. What makes you say that TaylorMade has had no quality product for “moons?”

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