Adidas Group to acquire Adams Golf for $70 million
Monday, May 13, 2013
The Adidas Group, parent of TaylorMade-Adidas Golf, announced March 19 that it has reached an agreement to acquire Adams Golf for approximately $70 million.
In an age of industry consolidation, Adams had defied that trend in recent years, growing steadily as an independent, mid-sized club manufacturer. But the company’s share price ultimately didn’t reflect its success, prompting Adams’ board of directors to retain Morgan Stanley in January to explore “strategic alternatives,” including the sale of the company.
Among the various rumors regarding a potential sale, Adidas’ name had surfaced repeatedly as a suitor. Industry observers theorized that Adams, which has a strong following with senior golfers and is known for its game-improvement clubs, would complement TaylorMade’s focus on premium-performance equipment for better players. The deal’s announcement confirmed such sensibilities.
In a written statement, Adidas Group CEO Herbert Hainer said: “This acquisition reflects our commitment to continued growth in the golf category. The proposed combination of Adams Golf and TaylorMade-adidas Golf brings together two highly complementary sets of brands.”
Added Mark King, president and CEO of TaylorMade-Adidas: “Our mission is to be the best golf company in the world across all geographies, products and customer demographics, and adding Adams Golf is another important step in achieving that goal.”
The Adidas Group plans to finance the acquisition with cash or through existing credit lines. The transaction still needs to undergo closing conditions and receive approval from Adams’ shareholders, but is expected to close in mid-2012.
The agreement calls for Adidas Group to acquire all of the outstanding shares of Adams for $10.80 per share. That represents a premium of approximately 71 percent to the share price before Adams announced it was considering a possible sale.