TaylorMade Acquires Ashworth

2008-10-21

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By Steve Pike

One of the more high-profile mergers in golf industry history is about to take place. Equipment giant TaylorMade-adidas Golf has entered into a definitive agreement to acquire all of the outstanding shares of struggling apparel company Ashworth, Inc. for $1.90 per share in cash. That makes it a $72.8 million deal and and includes the assumption of $46.3 million worth of Ashworth debt. The transaction will be effected through a tender offer to be launched shortly by a subsidiary of Taylor Made Golf Company, Inc., which is owned by Germany's adidas AG.

The adidas Group plans to finance the acquisition with cash on hand or through existing credit lines. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter 2008.

In the early 1990's, Ashworth was the dominant name in golf apparel, but despite its sales success, consistently struggled with its bottom line and management issues. Companies such as Nike Golf, Fairway & Greene and adidas Golf eventually took heavy bites out of Ashworth golf sales and market shares. Talk of an Ashworth sale has been around the golf industry the past several months and became louder when the Vista, Calif. based company reported a nine-month loss of more than $12 million on sales of $137.5 million compared with a $5 million loss on sales of $147 million the same period in 2007.

adidas AG and TMaG executives see the acquisition as an opportunity for TMaG to widen its product range, strengthen its distribution platform and to extend its marketing presence.

"This deal provides exciting prospects for our colleagues, partners and customers around the world. The Ashworth brand fits perfectly into TaylorMade-adidas Golf’s line-up of brands and together we will be able to increase efficiency and drive the golf apparel business going forward, leveraging a broad set of resources,” said Allan Fletcher, chief executive officer of Ashworth, Inc.