Under Armour rumored to have its sights set on Adams Golf

Adams Golf President Chip Brewer

The PGA Merchandise Show in Orlando is sometimes referred to as “Rumor Central.” Indeed, it’s often difficult to separate fact from fiction on the halls of the Orange County Convention Center. Here’s an interesting one that might have some legs: Under Armour, which has made great strides in the golf industry the past few years, is looking to acquire equipment company Adams Golf.

Adams Golf earlier this month announced it had hired Morgan Stanley to assist in approving its present value (read: stock price) so it’s not surprising that companies – inside and outside the golf industry – are kicking the tires. Under Armour reported it ended 2012 with $175 million in cash and cash equivalents, so it appears to have more than enough to buy Adams Golf, which based on its current stock price (it closed today at $7.80 per share) has a market value of around $60 million.

There is a likely a long way to go before anything plays out, but the potential deal is intriguing as it’s reminiscent of the Puma Golf-Cobra Golf deal in 2010 that merged a hot apparel company with a well-known equipment company.

Even more intriguing is the speculation that has Adams Golf President Chip Brewer as a leading candidate to become president of Callaway Golf. Callaway interim President Tony Thornley told Wall Street analysts this week that the company is looking for a leader “who is going to carry on the initiatives that we’ve put in place. But, there are a lot of people interested for sure. So I think that we will conclude that here in the not-too-distant future.”

Given Brewer’s success at Adams Golf the past 10-plus years, he’s got my vote.



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