Korean consortium seals billion-dollar Titleist acquisition

Sportswear manufacturer Fila has joined with another South Korean company, Mirae Asset Private Equity, to lead the purchase of Acushnet, owner of the Titleist and FootJoy golf brands, for US$1.23 billion.

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Sportswear manufacturer Fila has joined with another South Korean company, Mirae Asset Private Equity, to lead the purchase of Acushnet, owner of the Titleist and FootJoy golf brands, for US$1.23 billion.

As a result of the acquisition from Fortune Brands, Fila will supplement its existing sports range with Titleist’s high-performance golf balls and clubs, as well as FootJoy shoes and gloves. The consortium will take 100 per cent control of Acushnet in the summer, and will first pay off the approximate US$260 million debt the company has.

Both Titleist and FootJoy are market leaders and currently hold around 55 per cent of the market share in their respective fields, helping to earn Acushnet revenue of US$1.2 billion in 2010.

Mirae Asset reportedly paid around US$700 million, with Fila contributing US$100 million of this amount. The Korean National Pension Service added a further significant amount while the remaining US$500 million was provided by Korea Development Bank through a secured loan.

Fila saw off competition from Adidas, golf brand Callaway and asset management firm Blackstone to claim Acushnet. Adidas is believed to have offered more than Fila, but concerns existed over potential conflict of interests with their existing ownership of golf brand TaylorMade, an ongoing antitrust investigation and potential restructuring of Titleist following the purchase. As a result, Fortune Brands opted for the Fila consortium, primarily due to its having no plans to alter the brand.

"The acquisition of Acushnet transforms our platform with a stable of premier world class brands," said Fila Korea chairman and chief executive Gene Yoon. "With our extensive knowledge and reach in Asia, we believe that the Acushnet brands have incredible new opportunity for growth in the emerging markets in Asia."

JH Ryu, chief executive of Mirae Asset, said, “The seller had confidence in us to successfuly close the deal because Mirae and Fila are global brands.”

Mirae Asset and Fila Korea are reportedly hoping to extend the Acushnet brands into the strong golf market in South Korea, where currently around four million people play the sport per year, and tap into the growing golf industry in China within three to five years.

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