Callaway Trying To Buy Titleist!

[GolfSpy_X]

IF YOU CAN'T BEAT'EM IN COURT....BUY'EM!

 

Buzz on Wall Street also has emerged about whether Callaway might team up with private equity giant Blackstone Group LP to buy some ---- or all ---- of Acushnet Co. after Massachusetts-based parent Fortune Brands Inc. announced plans to sell or spin off the business four months ago.

 

"We have heard rumors that Callaway has sought out a financial partner in order to make a run at buying Acushnet," said Casey Alexander, analyst with Gilford Securities Inc. "They clearly don't have the financial wherewithal to take on this deal by themselves, but with a large private equity partner we suppose that financially it could be pulled off, and we have heard that they may in fact have a partner."

 

Other potential buyers for Acushnet, or pieces of the business, include Nike Golf, Puma Golf, TaylorMade, an assortment of private equity firms, and Asian conglomerates, according to analysts.

 

Callaway may face some challenges if it wants to pull off such a purchase.

 

In the past two years, for instance, Callaway has racked up losses of $50.3 million while revenue has bounced around. Last year's revenue of $967.6 million was down 13.4 percent from 2008 when the economy tanked, but it was up from 2009's revenue of $950.8 million.

 

Acushnet is a top maker of balls, clubs, gloves and shoes through the Titleist, Pinnacle and FootJoy brands, and has some presence in Carlsbad.

 

Acushnet spokesman Joe Gomes declined to comment on the unit's future.

 

Analysts said last week's announcement by Acushnet that a federal court ruled in its favor in a long-running patent dispute with Callaway does not create an impediment to completing a possible sale to Callaway.

 

The patents at the heart of the dispute were once owned by Top-Flite Spalding. When Top-Flite Spalding filed for bankruptcy in the late 1990s, Callaway bought the business and stopped paying royalties on some golf ball patents in which Acushnet also claimed to have an interest. If the two rivals become one business, the litigation over the patents would vanish, Alexander said.

 

Analysts also mentioned that Callaway may be losing market share to a new club introduced by Carlsbad's TaylorMade, a unit of Adidas-Salomon AG.

 

"Callaway appears to have to have lost meaningful share in the woods segment and, to a lesser degree, the ball segment, offset somewhat by better irons share," wrote James Hardiman, analyst with Longbow Research, in a recent research note.

 

A TaylorMade official declined to comment on whether his privately held company also was interested in bidding on Acushnet, but confirmed that research data shows that the company's new R11 driver is building share over rivals.

 

 

 

 

SOURCE: http://www.nctimes.c...2c6f779586.html

[skihippy]

Here I was waiting for Dicks to buy out Callaway until I saw they bought Nickent. This would be a huge bounce back for Callaway.

[Miboy62]

That would be a crazy buy.

[Justin66]

That would be a crazy buy.

 

 

We're slowly (or maybe not so slowly) making our way to having a handful of "major players" in the golf market. That's not good news for us. I highly doubt it's going to be good long-term for Callaway (acquiring Ben Hogan and Top-Flite wasn't), or be some route for the "little guys" like W/S, Srixon, or a component company to make a move... not with the brandwashing of today's golfers.

 

Won't be long before we get to golf's version of checkmate.

[RookieBlue7]

Under Armour is still a major player in the Acushnet sweepstakes, from what I've read. They have more capital than Callaway and wouldn't need an equity firm.

[ninetails]

Merging of two major OEMs doesn't sound good for consumers.