Adams Golf hires banker to explore options
Monday, May 13, 2013
Adams Golf, which has struggled to recover its shareholder value after the worldwide equity collapse of 2008, has retained investment bank Morgan Stanley to explore options that could include a sale of the company.
Chip Brewer, Adams Golf’s chief executive officer, told Golfweek in a phone interview from his office in Plano, Texas, that Adams’ board of directors voted unanimously in late December to hire Morgan Stanley.
“The board felt the share price doesn’t correctly reflect the prospect of the business,” Brewer said. “We’re pretty optimistic there will be a whole range of options out there.”
Those options could include:
• issuing a dividend to shareholders
• repurchasing shares
• selling the company
• taking the company private.
On the news that Adams hired Morgan Stanley, Adams stock (ticker symbol ADGF on the NASDAQ exchange) jumped 13.5 percent, or 85 cents, to $7.16.
Adams, founded in 1987 by Barney Adams, found success with its Tight Lies fairway woods. The company went public in 1998, topping $70 per share in its initial offering. By 2000, the share price had dropped to less than $1.
The stock steadily recovered in recent years and was up to $8.80 in January 2008. After the worldwide economic troubles decimated equity markets, Adams shares had slipped to $2.30 by July 2009.
The company’s stable of touring pros includes Yani Tseng, the world’s top-ranked female player, and eight-time major champion Tom Watson. Adams recently signed Champions Tour player Kenny Perry.
Brewer points to Adams’ $100 million in revenue in 2010 and a market capitalization of $55.8 million as signs that the company has a bright future.
“We are a growth business,” Brewer said. “Our revenues are back to 2007-2008 numbers, and our market share is climbing.”