Three-plus years after KPS Capital Partners acquired TaylorMade Golf from Adidas for $425 million, the equipment manufacturer could be on the verge of changing hands once again. According to a New York Times report, the New York City-based private equity firm has tapped Morgan Stanley to run a sale of TaylorMade.
When reached for comment by GOLF.com, a TaylorMade spokesperson offered a statement: “As a privately held company, we don’t comment on our ownership structure. We will continue to build on our track record of manufacturing industry leading products, servicing our customers, and helping golfers of all skill levels play better golf. As the season begins to ramp, we are excited about the launch of our new 2021 golf equipment and balls.”
Assuming KPS finds a buyer, the firm stands to make a significant profit off of its initial investment which, in reality, was a little more than $200 million in cash. TaylorMade is currently being valued at $2 billion, according to the report, which is in line with other major equipment brands like Carlsbad, Calif.-based competitor Callaway ($2.63 billion market cap).
The timing of KPS’s decision to put TaylorMade up for sale comes on the heels of a major uptick in rounds and equipment sales in the midst of a global pandemic.
During Q3, equipment manufacturers saw a significant increase in club, bag, ball and shoe sales, according to figures from Golf Datatech, a marketing research firm. The increase for July, August and September exceeded the $1 billion mark for the first time ever in the third quarter — the only other time Q3 sales exceeded $850 million was in 1997 — and fell just short of breaking the all-time record, which was set in the second quarter of 2008 ($1.013 billion).
While private equity firms are in the business of turning a profit and cutting costs, KPS has found a way to increase TaylorMade’s bottom line while adding marquee names to its stable of tour players, including Rickie Fowler (ball), Collin Morikawa, Matthew Wolff and Tommy Fleetwood. Masters champion Dustin Johnson also re-signed with TaylorMade at the beginning of 2021.
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