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Titleist parent company Acushnet Holdings goes public
28 Oct 2016
by Pete Wlodkowski of AmateurGolf.com

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FAIRHAVEN, Mass. (Oct. 27, 2016) -- Tomorrow investors will get their first chance to buy shares of Acushnet, the parent company of one of the most iconic brands in our storied sport (and a sponsor of this website) -- Titleist. The company, which also sells Vokey Design wedges, Scotty Cameron putters, and FootJoy shoes, first annouced its plans in June.

Trading under the symbol "FORE" on the New York Stock Exchange (NYSE), the shares are being offered at a price of $17, which will raise an expected $329M for Acushnet's parent company, Fila Korea and other insiders selling the shares. The shares are being sold by company insiders, which means that after the IPO is complete the majority voting power will be in the hands of Fila.

Don Dion of the popular investment website Seeiking Alpha gave this summary in his 10/26 update:


Acushnet (NASDAQ:GOLF), manufactures and sells golf equipment under various brands, with the most notable being Titleist. The company is expected to IPO on Friday, 10.28.16. GOLF plans to offer 19.33 million shares at an expected price range of $21 to $24. [they priced at $17, ed] Shares will be offered by company insiders; therefore, the company will not receive any net proceeds from the offering. Upon completion of the offering, Magnus, which is wholly-owned by Fila Korea will control 53.1% of the common stock. Fila Korea Ltd., purchased Acushnet for $1.23 billion in 2011.

Assuming GOLF prices at $22.50, the mid-point of the range, it will have a market cap value of $1.667 billion. Underwriters for the deal include: J.P. Morgan, Morgan Stanley, Nomura Securities, UBS Investment Bank, Credit Suisse, Daiwa Securities, Deutsche Bank, Jefferies, Wells Fargo Securities, D.A. Davidson, KeyBanc Capital Markets, Raymond James, and SunTrust Robinson Humphrey.

Read full Seeking Alpha story


What does this mean for golfers?

Well, probably not much initially (unless you buy the stock of course). In terms of the way Titleist and FootJoy do business, it should be "business as usual" -- just as it was when the company was acquired by their parent Fila Korea. Many golfers probably didn't even know a change of ownership took place. All credit to the new owners (and a dedicated management team in Fairhaven, Mass.) for that.

You'll still find Titleist and FootJoy products in ample supply everywhere. And while the company doesn't directly receive funds from this sale, it will certainly be in the limelight for the week and as we begin a new season on Tour you might expect to see some Nike players taking a hard look at making a move to Titleist.

What does it mean for investors?

If you believe in the long term prospects for a market leader in a slow growth sport then buying shares of "GOLF" could be a good long term investment. And most certainly, if you watch CNBC or Bloomberg you're going to see some coverage not only of the IPO, but each quarter when they report earnings. Due to the relatively small market cap, however, don't expect much more than a mention on busy earnings days when the titans of tech, biotech, healthcare, and more report their numbers. Just as one example, Under Armour (UA)'s market cap is 8-10 times more than the expected number for Acushnet.

What does the golf industry look like today - who owns who?

You might remember when Acushnet was owned by a conglomerate called Fortune Brands. You may also recall that Cobra was one of Acushnet's brands, prior to them spinning it off. Indeed, it can be hard to keep a scorecard of "who owns who" in the golf business, especially with the major footwear companies playing a major part (TaylorMade/adidas, Cobra-Puma Golf).

Callaway Golf (trading under the symbol ELY) is currently the only "pure play" golf company you can buy shares of. Being joined by Acushnet could be good news for both companies, especially as the golf business continues to stabilize. The chart below breaks down the golf companies by ownership:

ACUSHNET
(Will trade under symbol GOLF) - majority owned Fila Korea

CALLAWAY (ELY) Shares have doubled from mid-2011 low of $5 on strength of product and by focusing on core business

TAYLORMADE
(Includes Adams and Ashworth brands) - Owned by adidas AG who announced in May they were selling and is reportedly close to identifying new ownership. Tiger Woods was said to be in talks to be part of an ownership group. Don't believe everything you hear.

PING - Privately held company that pioneered custom fitting for the golf masses. Had one of the most successful drivers of the past 2-3 years with the G30.

COBRA/PUMA GOLF - As the name implies, the company is owned by shoemaker Puma, and recently signed Bryson DeChambeau to their Tour staff

CLEVELAND/SRIXON - Owned by Dunlop, which falls under the Sumitomo Rubber umbrella

NIKE - Continues to make shoes and apparel, but exited the golf ball and club business just months ago

BRIDGESTONE - Like Cleveland/Srixon, the parent company is a rubber/tire company and the ball is their main business. They made the Nike ball on contract, so will see a small hit in that area.

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