Acushnet plans to accelerate growth in Asia
Wednesday, September 14, 2011
Back home in South Korea, Gene Yoon is widely regarded as a rainmaker.
After all, he engineered one of the most successful initial public offerings in the history of the Korean Stock Exchange when he took Fila Korea public in 2010.
Don’t be surprised if Yoon – who recently led a consortium of Korean investors to acquire Acushnet Co., which owns Titleist and FootJoy – orchestrates an encore in golf.
At a media event held Aug. 31 near Acushnet’s headquarters in Fairhaven, Mass., Yoon provided a glimpse of his ambitions: To take Acushnet public, perhaps as soon as four years.
“We’re going to try to create the kind of opportunity (in which) all the investors can make the big money they’ve never seen before,” said Yoon, Acushnet’s new chairman. Sensing that he might have said too much, Yoon added with a touch of humor: “By the law, I suppose I (should) not say that specifically.”
Though he can’t guarantee such riches, Yoon made clear the new ownership group’s plans to fulfill its bullish intentions. The investors, led by Fila Korea Ltd. and Mirae Asset Private Equity, acquired Acushnet for more than $1 billion from Fortune Brands, which had owned the golf entity for 35 years since purchasing it for $55 million in 1976.
“We expect the transition to be seamless to the thousands of trade partners and the millions of serious golfers around the world,” Yoon said. “There is a significant potential in Asia to solidify our position as golf’s global premier brand, particularly in China, Korea and Japan. Mirae Asset and Fila Korea have great reach in this market, and we plan to help Acushnet facilitate growth at a rapid rate.”
Though Acushnet recently opened a golf ball plant in Thailand, Yoon insisted that Titleist’s U.S. manufacturing – and employment – would continue.
“The reason why we built that ball plant in Thailand is because we are going to try to put production closer to the market,” he said. “We try to save the cost of transportation. That’s the only reason. I think mostly the plant that we have in the U.S. will cover the European market as well as the U.S. market. If you still have some worry that Acushnet may go away from this area – that’s 100 percent wrong. Please delete that kind of thinking.”
The new owners’ intensified push into Asia validates Acushnet’s forecast that the Asia Pacific market will represent “40 percent of golf’s GDP” by 2015, according to Wally Uihlein, who will remain as the company’s CEO.
“Fortune Brands was a great partner, but I would add, though, that at the end of the day, they didn’t make as many trips to Asia Pacific as I would have liked for them to see why we needed to invest in those markets,” Uihlein said. “We certainly don’t have that concern when the sources and origins of the investor community is based in Asia Pacific. Because of that, we’ve actually accelerated our expectations in Asia Pacific for the next couple of years, and with its growth, we expect to grow proportionately in size compared to where we think that market will be.”