NEWS FLASH - Titleist/FootJoy To Be Sold Or Spun Off!

[jamo]

That's what I've seen reported also.

 

I've seen it in pictures too.

[xxio]

After SC is sold, I fear they will never be the same...and I want an original!

 

 

You forgot to put an ironic smiley at the end of your post.

[Moecat]

http://seekingalpha.com/article/237626-golfing-industry-speculation-who-might-acquire-acushnet

 

With the recent news of an 11% position in Fortune Brands (FO), Bill Ackman of Pershing Square Capital Management has created a slight buzz in the golf industry. As a result of rumors regarding the possible split of Fortune Brands into three business units (distilled spirits, golf, and home & security products), there is speculation about the possible Acushnet unit. The maker of Titleist and FootJoy products is a leader in the golf industry, and by most standards the most successful golf division in the world. The question is: Who would be interested in Acushnet?

 

From the other three big manufacturers, there isn't really much of an opportunity/justification for an Acushnet acquisition. Let's take a look at why for each company:

 

Callaway (ELY) – Unfortunately for Callaway, Fortune Brands would most likely want to be paid (surprising, I know) -- and handsomely -- for the rights to two of the premier brand names in golf. Callaway has struggled in the past few years to even finance its own operations, and is in no position to take on more liabilities.

 

TaylorMade, owned by Adidas (ADDYY.PK) – Why? TaylorMade has done a fantastic job building its brand in the recent past, especially with the continued success of the R series (the #1 driver in golf). There is really no reason why Adidas should spend money purchasing Acushnet if it can invest that same capital back into TaylorMade and achieve returns comparable to what it's realized since acquiring the brand in 1997.

 

Nike (NKE) – While I still don't see it happening, this is the most reasonable of the three. While Nike has success in apparel, it has struggled with its equipment and may not be too excited by the opportunity to throw a couple hundred million at the issue. This is a category where Titleist has succeeded, and could drive growth to revenues/income. How Nike would play this out -- hold on to the Nike Golf brand? Divest to private equity? -- is anybody's guess.

 

As noted above, this is all speculation for the time being. I will keep readers informed of any new developments that come my way.

 

About the author: Alex Morris

 

My name is Alex Morris. I am a senior at the University of Florida and will be graduating with a Finance degree in the spring of 2011.

 

The basis of my investment philosophy is long-term, with an emphasis on patience and discipline. I search for companies within my circle of competence that posses a sustainable competitive advantage, as well as managers that display the highest level of integrity and superior capital allocation skills.

 

If you are interested in doing business or networking with me, please email me at [email protected]. Thank you for your time.

[jamo]

I think a sale to Nike would make the most sense just from a golf equipment perspective. Acushnet worked great with Titleist making traditions equipment and Cobra making new stuff. Nike could potentially do that same thing.

[reg]

Nike buying Titleist would absolutely trash the Titleist brand, which is the most valuable part of Titleist.

[RookieBlue7]

Nike, I'm betting, doesn't want the Titleist Brand, just Scotty Cameron. Other companies have their big guns in the putter department, Nike putting a Swoosh next to Scotty Cameron only helps them. Course they'd be buying the name and not Don T. Cameron, who I'm assuming would go boutique like Bettinardi did when the Mizzy split happened. But what name could he use? Cause they'd own the brand name.

[Justin66]

But what name could he use? Cause they'd own the brand name.

 

 

Maybe an acronym of his name? Still mean the same, and wouldn't infringe on any copyrights (though not sure on that). That, or just call them "Joe" putters.

[reg]

Cameron can be the $300 putters, Method $200 and the other junk Nike offer $100. Something for everyone.

[smhgolf]

Maybe that's why Tiger's been testing with the method putters....Scotty/Nike method prototype to come soon?

[duckscanjuggle]

MGS, any more info as to "who" spotted Cameron at the Oven? Just some guy? A guy you know? Somebody who's closely connected with Nike/SC/The Dallas Cowboys? Anything?

[spglavin]

...

[GolfSpy_X]

Peter is actually VP of Business Development and Partnerships for Titleist.

 

 

I caddied for Peter Broome, who is the CEO of titleist, a few times this summer at Pine Valley and if I would have know about the selling off of the brand I would have tried to get some inside info from him, maybe next season I'll try and get some info which would be nice

[HoosierGolfer]

Why it will not be Nike or any other big OEM;

 

http://www.golfdigest.com/golf-tours-news/2010-12/golf-titleist-johnson-1209

[berggolf]

I think FB is dumping all there brands because golf club sales have dropped drastically since the economy has tanked. Add that to the ridiculous number of high ticket players titleist and FJ have sponsored, they might wanna just cut ties with what they see as a dying market.