After months of speculation and deliberation, Fortune Brands, Inc. has announced a definitive agreement for the sale of its Acushnet Co. golf business to a group led by Fila Korea Ltd., the owner of the Fila brand globally, and Mirae Asset Private Equity, the largest PE firm in Korea. The purchase price is $1.23 billion in cash.
With the close of this deal, only Callaway Golf will remain as the only U.S. golf brand owned by an American company. Adidas Group owns the TaylorMade brand and Puma parent PPR acquired Cobra Golf from Fortune Brands last year.
The transaction occurs about six months after it became known the Fortune Brands advisors were exploring a possible sale of Acushnet, which consists of the Titleist and Footjoy brands and their respective sub-branded products. The company made it official in December, when it initiated a sale process for Acushnet after announcing that it proposed to separate its businesses following a strategic review process conducted by the Board and management.
In late-January, Morgan Stanley send out marketing materials and non-disclosure agreements for the sale of Acushnet with suitors rumored to have been Nike, Adidas, Mizuno and Callaway, among others.
FO estimates it will realize net proceeds of approximately $1.1 billion after taxes and expenses.
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. According to multiple reports, Fila fended off interest from PE fund Blackstone Group, among others.
“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, adding that the sale process generated broad interest from a range of buyers.
Fila Korea acquired the global Fila brand in 2007 from Sports Brands International, a unit of hedge fund Cerberus Capital Management. The deal gave Fila Korea rights to the worldwide use of footwear and apparel brands of the parent firm.
