Fortune Brands, Inc. announced a definitive agreement for the sale of its Acushnet Company golf business, featuring the Titleist and FootJoy brands, to a group led by Fila Korea Ltd., the owner of the Fila brand globally, and Mirae Asset Private Equity, the largest private equity firm in Korea. The purchase price is $1.23 billion in cash.
Fortune Brands estimates it will realize net proceeds of approximately $1.1 billion after taxes and expenses.
“This transaction is a very important milestone as we execute our proposed plan to separate our three strong businesses for the purpose of maximizing long-term value for our shareholders,” said Bruce Carbonari, chairman and chief executive officer of Fortune Brands. “Not surprisingly, the sale process for Acushnet generated broad interest from a range of prospective buyers and resulted in this agreement that reflects the superior performance and prospects of the business. The proceeds from this sale will strengthen Fortune Brands balance sheet and support strong capital structures for both Beam and Fortune Brands Home & Security as they look to the prospect of competing as independent companies later this year.
“At the same time, we believe Fila Korea and Mirae will enable the outstanding team at Acushnet to continue pursuing the strategies that have made it the preeminent company in golf, including delivering advanced-technology new products and driving strong growth across Asia,” Carbonari continued. “We are grateful to all the associates at Acushnet who have built an industry leader and contributed to Fortune Brands success for so many years. I have no doubt they will take Titleist and FootJoy to even greater heights in the future.”
According to Gene Yoon, chairman and chief executive officer of Fila Korea, Ltd., “The acquisition of Acushnet transforms our platform with a stable of premiere world class brands. We are equally excited to embrace Acushnet’s exceptional management team led by Wally Uihlein. With our extensive knowledge and reach in Asia, we believe that the Acushnet brands have incredible new opportunity for growth in the emerging markets in Asia.”
“We are very impressed with what Acushnet management and employees have accomplished so far. We will fully support the company to remain focused on its core golf expertise and continue driving the growth of the industry,” said JH Ryu, the CEO of Mirae Asset Private Equity.
Fortune Brands initiated a sale process for Acushnet after announcing in December that it proposed to separate its businesses following a strategic review process conducted by the Board and management. The sale has been approved by the Fortune Brands Board of Directors as well as the Boards of Fila Korea and Mirae, and is subject to certain closing conditions, including regulatory approvals. The transaction is expected to close this summer.
As previously announced, Fortune Brands also intends to spin off its Home & Security business and become a pure-play distilled spirits company named Beam. The company is targeting to complete the business separation early in the fourth quarter. The spin-off remains subject to completion of detailed separation plans, customary regulatory approvals and final Board approval.
Fortune Brands was advised on the Acushnet transaction by Morgan Stanley and Centerview Partners as financial advisors and Chadbourne & Parke as legal advisor. Fila
Korea and Mirae were advised by Nomura, Korea Development Bank and the M&A and Korean practice groups of counsel McDermott, Will & Emery.
Acushnet claims to be the leading and most profitable golf equipment
company in the world. Titleist is the #1 ball in golf and a leader in
high-performance golf clubs. FootJoy is the #1 shoe and glove in golf
and a leader in performance outerwear. Net sales exceeded $1.2 billion
in 2010, with nearly half of revenues generated in markets outside the
United States. Operating income before charges was $80 million in 2010,
and operating income on a GAAP basis was $89 million.
Established
in Italy in 1911, Fila is a leading sport and leisure footwear and
apparel brand that is distributed worldwide. The group led by Fila Korea
and Mirae also includes the National Pension Service of Korea, the
fourth largest pension fund in the world, and Korea Development Bank,
Korea’s largest government-owned bank.
