이 기사는 2021년 05월 20일 08:03 thebell 에 표출된 기사입니다.

Orchestra Private Equity’s sale of Majesty Golf is drawing attention after Seoul-based PE firm Centroid Investment Partners’ recent acquisition of global golf equipment company TaylorMade.

Orchestra PE and its sale manager Goldman Sachs are receiving letters of intent from prospective buyers for Majesty Golf, industry sources said on Monday. The final round of bidding is expected to take place in mid-June, with SG PE, a consortium of KMH and Keystone PE, and Stiker Capital Management joining the race.

Retail giants including Shinsegae, Lotte, and Kakao, which were considered as potential buyers of Majesty Golf, have turned their eyes to online retail platforms on the market, such as eBay Korea, W Concept, and ZigZag.

Last week, Centroid announced its acquisition of TaylorMade, one of the three largest golf equipment makers in the world, heightening strategic and financial investors’ interests in the Majesty Golf deal.

“Golf courses were one of the hottest sectors in the M&A market last year,” said an industry source. “The focus has shifted to golf equipment companies this year, and market insiders are paying more attention to them after the TaylorMade deal.”

The price tag of Majesty Golf is expected to depend on the price of TaylorMade, which Centroid bought for nearly 2 trillion won ($1.7 billion), or 15 times earnings before interest, taxes, depreciation and amortization (EBITDA). Shares of its peer companies, Acushnet and Callaway, currently trade at 15~20 times EBITDA.

Market insiders cautiously expect Majesty Golf to be sold for more than 300 billion won. The company recorded sales of 80.8 billion won and EBITDA of 22.8 billion won in 2020. After applying a multiple of 15 times to its EBITDA, the firm’s estimated valuation comes to 342 billion won. Its valuation amounts to 273.6 billion won even after a multiple of 12 times is applied.

Majesty Golf had long- and short-term debts of about 50 billion won on a consolidated basis at the end of 2020, with net debts estimated to be around 30 billion won. The multiple of 15 times would give Majesty Golf its equity value of between 250 billion won to 350 billion won.

If Orchestra PE successfully sells the golf equipment maker at a multiple of around 15 times, it is expected to generate a return of 2.5~3 times its invested capital (approximately 116 billion won) in three and a half years. (Reporting by Se-hun Jo)