Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?
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Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?http://www.golfblogger.com/index.php...sell_titleist/
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Hedge funder and “activist shareholder” William Ackman may get his way with plans to split Fortune Brands into three separate entities, perhaps selling off the seminal Titleist name to one of its golfing competitors. Ackman’s Pershing Square Capital Management owns 11 percent of the company.
Fortune Brands always has been a bit of a Frankenstein monster, owning a variety of seemingly disconnected lines such as Titleist, Jim Beam, Makers Mark, Moen Faucets, and Masterlock. Fortune Brands is descended from tobacco giant American Tobacco, which was chartered in 1890. Following a Supreme Court ordered break up in 1911, American Tobacco diversified into a variety of alcohol, office (Acco) and home wares products. It changed its name to American Brands in 1969, and became Fortune Brands in 1997. Brown and Williamson acquired the tobacco division in 1994.
Acushnet (Titleist) began as a rubber processing company in 1910. In 1932, it expanded its line to golf balls. Fortune Brands acquired the company in 1976. Fortune bought Foot-Joy in 1985 and Cobra Golf in 1996.
Ackman is a prototypical corporate raider, who apparently wants to turn over his Fortune Brands stake into quick profits by selling off parts of the company. He’s been involved in several other machinations lately, including trying to acquire five seats on the Target board of directors, and acquiring a significant stake in JC Penny. That last action prompted Penny to begin anti-takeover actions. Tax issues apparently present the biggest obstacle to Ackman’s plans.
As it is now, Ackman apparently hopes that Callaway or Nike will buy the golf brands, and that Bacardi or Diageo will buy the spirits division. I frankly don’t see any good coming from this. The golf business already is an oligopoly, and this will just continue that trend. Nothing is served—other than Ackman’s bank account—by increasing that trend.
Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?I don't know that Titleist would fit the Callaway type brand of golfing equipment. Titleist has that classic aura about the company where Callaway likes to market themselves as technology driven. For example their new forged carbon Razr driver. The new Titleist driver is probably the most "technology" Titleist has put out in years.
Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?Puma bought Cobra, Adidas bought Taylormade, Nike created its own golf brand. I hope no one here is suggesting that Reebok buys Acushnet… (haha)
I don't see any company in Japan (i.e. Bridgestone, Mizuno or one of the other smaller club makers here) big enough to buy and sustain two brands like that… but then again who knows…
Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?Unless they're purchased by Mizuno (too small) to corner the forged iron market, there are several quasi- sports clothing companies that would be a good fit.
I'll add one to the list and give a couple thoughts on it. POLO / Ralph Lauren.
1.) Classic look - they're ads seem very compatible with Titleist
2.) Smart enough to have trademarked the word "polo" to give people the impression they invented the polo shirt. Scotty Cameron would be proud.
1.) Tom Watson plays Adams
2.) Luke Donald is a Mizuno guy
3.) Their cologne smells like old guy
Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?It's always fun to speculate on M&A targets and buyers. How about if we take up a collection here on TST and make an offer?
I think it likely that the buyer will be a private equity firm. It sounds like a number of the bigger firms have the funds right now are actively seeking acquisition targets. A strategy could be to reduce operations cost, make other acquisitions to find complimentary products and/or brands, then combine the similar pieces together (like clothing brands) and carve it up for resale.
Failing that, I'd suggest a good candidate is Amer Group PLC, owners of Wilson. Would give them an opportunity to have an upscale brand in the golf business, reposition Wilson as entry level or more mass market clubs, and take better advantage of scale to reduce the costs of both brands. It would also further their distribution channels, giving both brands potential greater exposure.
I don't see a company like Callaway or TaylorMade pursuing Titleist. All it would to for them is increase market share in the short term but that would be diluted fairly quickly, as they would need to find cost reductions across the common operations and hence marketing/sales efforts would inevitably be scaled back a bit, allowing market share to even out again among the different competitors.
Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?Would be interesting to see how the revenue and profits break out for Titleist. I'd guess the majority is from golf balls, then clubs, though not sure where FJ would fit in here.
I'd think Callaway would benefit the most since it would propel them to #1 in shoes and golf balls, two areas where they have trailed behind their competition.
Nike typically doesn't do well with acquisitions because of they seem to have real problems with NIH (not invented here) products.
UA would be interesting, and provide them with instant market share that would be enhanced by their name and golf clothing lines.
Mizuno would be a good choice too, but I have no idea what their finacials are or if they could pull off such a large deal.
Re: Acushnet (Titleist, Scotty Cameron, Pinnacle, FootJoy) For Sale?http://golfbiz.net/daily-pulse/
WHERE THERE IS SMOKE, OFTEN THERE IS FIRE: Sometimes to understand your true value it takes an outside presence. That was the case for Fortune Brands (FO: NYSE), which announced today that it intends to split the company into as many as three separate businesses under a plan approved in principle by its board of directors, according a report in the Wall Street Journal. The company intends to spin off its home and security unit to shareholders in a tax-free transaction, and to either sell or spin off its golf division, according to people familiar with the matter as reported by the Wall Street Journal. It’s believed that Fortune Brands will remain an independent, publicly traded company focused on liquor brands. The move comes two short months after activist shareholder William Ackman's hedge fund disclosed it had taken a significant stake in the conglomerate.