S Korean conglomerates in talks to invest in TaylorMade deal Centroid to raise 100~200 billion won from domestic strategic investors

Translated by Kim So-in 공개 2021-05-28 08:04:51

이 기사는 2021년 05월 28일 08:01 더벨 유료페이지에 표출된 기사입니다.

South Korea’s conglomerates are showing interest in the sale of TaylorMade, which is set to be acquired by Seoul-based Centroid Investment Partners.

Centroid is discussing possible equity investments with multiple domestic conglomerates, industry sources said Wednesday. The PE firm plans to finance 600 billion won ($536 million) from equity investments, 300 billion won from mezzanine investments and 900 billion won from acquisition financing to buy the golf equipment maker for 1.9 trillion won. It aims to raise between 100 billion won and 200 billion won from domestic strategic investors in equity investments.

Shinsegae, Lotte, Kakako, and Nexen Tire are among domestic major companies which are interested in the deal. Retail giants Shinsegae and Lotte plan to secure a leading golf company to strengthen their presence in the Korean golf equipment market.

According to research firm Golf Datatech, golf equipment sales in the U.S. rose 10.1% year-on-year to $2.8 billion in 2020, the highest in 15 years. Korean golfers spend the largest amount of money on golf equipment and clothing in the world.

Shinsegae has been actively expanding its golf equipment product lineups, with its subsidiary Shinsegae International importing and selling J.Lindberg locally. The retail giant could create synergies by jointly operating TaylorMade’s golf equipment and clothing stores and golf course facilities in large shopping malls.

Lotte Group also could easily enter the high-end golf market and quickly secure competitiveness in the sales of golf equipment through the deal.

Nexen Tire is also interested in the investment. Polybutadiene, a synthetic rubber material, is widely used to produce tires, as wells as golf balls. Global tire manufacturers including Japan’s Bridgestone and UK’s Dunlop Tires have diversified their businesses by producing golf balls.

Titleist is the top golf ball brand with a commanding 46% share in the global golf ball market, with Callaway Golf and TaylorMade ranking second and third with 16% and 11%, respectively.

Kakao has put efforts into the fast-growing golf market lately. Kakao VX, a subsidiary of Kakao Games, is trying to catch up on leading South Korean screen golf operator Golfzon after it raised 20 billion won from Q Capital Partners last year. It acquired management rights of Seungsan, a golf course operator and developer, and purchased Saint Four Country Club in Jeju Island from Halla Group, by partnering with Stonebridge Asset Management earlier this year.

Domestic major fashion companies are also continuously showing interests in the deal, using Fila’s acquisition of Acushnet alongside a financial investor a decade ago as a reference. (Reporting by Se-hun Jo)
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