The sale of Acushnet Co. to Fila Korea Ltd. and Korea’s Mirae Asset Private Equity reflects the importance of the Asian market to the golf industry, says Casey Alexander, analyst with Gilford Securities Inc.
“Acushnet is one of the biggest believers that the most rapid area of growth in golf is Korea,” Alexander told us Friday. “[Chief executive Wally Uihlein] and his guys absolutely believe that is one area that is really going to have meaningful growth. From that perspective, [the buyers] are an intelligent, compatible fit for [Acushnet].”
Soon after Acushnet’s parent firm Fortune Brands said in December that it would break up its company, rumors flew that Acushnet rivals Callaway, Nike, TaylorMade, and others would vie to acquire the maker of Titleist golf balls and FootJoy golf shoes. Friday, Fortune announced it would sell its $1.2 billion Acushnet unit to the footwear and apparel vendor and Korea’s largest private equity company for a reported $1.23 billion. Subject to routine regulatory approvals and closing conditions, the sale should close this summer.
Uihlein and his management team will continue to operate Acushnet as a stand-alone company and the firm will remain in Fairhaven.
The sale emphasized the priority that Acushnet places on the Asian market, said Alexander, who wrote back in January that an Acushnet acquisition by an Asian conglomerate would bring Fortune the best price. It also made sense, he said, because Acushnet had identified Korea as key to its strategy of advancing sales in Asia.
“Korea has a more developed middle class and also has an infrastructure that supports [the] growth of golf,” Alexander wrote.
Uihlein said as much. “The fact that Asia Pacific represents over 30 percent of the world’s total golf equipment spending, and that South Korean golfers are among the most passionate and organized in the game, is testament to the significant investment in the Acushnet Company by the Fila Korea and Mirae group,” according to the Acushnet CEO.
In a Friday interview with Golf World’s E. Michael Johnson, Uihlein noted that Korea’s three million golfers would expand to five million and that the “upside” to a country with two TV golf channels was “open-ended.”
The former regional sales rep for the southeast Massachusetts maker of the No. 1 golf ball in the world put it even more succinctly.
“Companies that are going to U.S.-centric,” Uihlein told Johnson,” will be roadkill on tomorrow’s scorecard.”
(Emily Kay is a regular contributor to New England Golf Monthly. Check her out on the Waggle Room, Boston Golf Examiner, National Golf Examiner, and GottaGoGolf websites. You may also follow Kay on Twitter @golfexaminer.)
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