The sale of Adams Golf (ADGF) to TaylorMade-adidas Golf, a unit of Adidas Group (ADDDF.PK, ADDYY.PK) was completed last Friday, 73 days after the deal was announced March 19.
Adams, in Wall Street-speak, had placed itself “in play” on Jan. 4 when the company began searching for ways to “enhance shareholder value;” code words for either selling the company or finding additional capital or both.
The price of $10.80 per share paid by TaylorMade-adidas Golf, a total of approximately $70 million, is $0.94 per share more thanAdamsclosed the day before TMaG’s purchase offer became public. It is also an astonishing 71% higher thanAdamsclosed the day beforeAdamsannounced they were looking to enhance shareholder value. Interestingly about a month after the “in play” announcement fromAdams, CEO Chip Brewer left the company to become Callaway Golf’s CEO.
John Ward, a long time TaylorMade employee and formerly vice president of domestic sales, takes on the job as new president of Adams.
What remains unclear is the level of integration the new owners will impose onAdams, i.e., exactly how it will be operated, as a separate entity or simply a brand within the larger company. For fans ofAdamsgolf clubs there’s another especially pertinent question, whichAdamsmodels will be dropped and what new ones will be added.Adamscertainly will benefit from TMaG’s worldwide marketing clout and product development prowess since the TaylorMade R&D department headed Benoit Vincent is arguably the best in the industry.
Mark King, TaylorMade president and CEO said, “This is an incredibly exciting time for us at TaylorMade-adidas Golf. We’ve just recorded the best first-quarter performance in the company’s history, and we’re on course to celebrate another record year. Adams Golf also got off to an excellent start in 2012, with sales up 25 per cent in the first quarter. Adding the Adams Golf brand will make the organization even better equipped to serve the needs of all types of golfers, helping us continue our quest to be the best golf company in the world in terms of the quality of our products, our presence on Tour and the volume of our sales.”
Prior to the sale Adams had been working with some success to add sales outside of theU.S. These efforts will helped by being part of TaylorMade and TaylorMade will benefit from the popularity Adams enjoys the women’s and senior’s market segments, neither of which have been strong areas for TaylorMade. Additionally,Adamsis the owner of the YES! putter brand purchased last year in bankruptcy and that may be helpful in TMaG’s efforts to gain more putter business.
Presently, TaylorMade dominates the metalwood business with the distinctive white headed R11s and RocketBallz lines having over 50% share plus they are the best selling iron brand in the domestic market.
