Liquor > Golf
By Kickntrue on 12/9/10
At least in the business world (according to Fortune Brands), the above statement is true.
onsumer products maker Fortune Brands Inc. plans to split into three companies, keeping its liquor business led by Jim Beam bourbon while shedding the units that make Titleist golf balls, Moen faucets and Master Locks.

Fortune Brands said Wednesday that it would focus on its spirits business, which generates annual revenue of $2.5 billion and includes brands such as Canadian Club and Maker's Mark.

...

Fortune Brands' golf business, Acushnet, which makes Titleist golf equipment and FootJoy golf shoes and gloves, will be either spun off or sold.
So... um, anyone have a little scratch they can get together?! Buying Acushnet seems like it'd be pretty fun! Think about it this way- free ProV1 golf balls for life. At almost $50 per dozen, buying the company may be the better deal.

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[ comments ]
tennesseeboy says:
It will be very interesting to see if anyone can come up with the money to buy them. Nike may be one of only a few companies currently in the business that could afford it. I'm not sure it's Nike's style to spend that kind of money to buy already developed brands. Adidas might be a possibility.
12/9/10
 
Tee it High. says:
Golf.com had a great breakdown of this transaction and the anti-trust issues that arise should another golf company purchase Acushnet. I think it is far more likely that a deep pocketed Private Equity firm buys the company and leaves current operations in place, which would be seemless to the consumer. With a revenue of $1.2 billion a year and the #1 position in both golf balls and shoes it is obviously an attractive brand but Nike or another company purchasing them would leave the acquisition tied up in court for upwards of a year probably.
12/9/10
 
bkuehn1952 says:
If I had to guess, @Tee it High is right with his prediction. Once the private equity group has squeezed the expense side real hard (e.g. move the ball manufacturing from Massachusetts to China), an IPO for Acushnet will follow.
12/9/10
 
dc8ce says:
Although, you have to admit, fifth of Jim Beam ($15) + dozen Gamer V2s ($20) > dozen Pro V1s ($40)
12/9/10
 
tennesseeboy says:
I must be great to have a business where people pay a premium for your product and then immediately lose it in the water/weed/woods.
12/9/10
 
Kickntrue says:
@tennesseeboy- agreed. try to think of another product like that... ammo, I guess.
12/9/10
 
rmumph1 says:
Liqour in the front, poker in the rear. That's my motto. I think that was on a Big Johnson t-shirt.
I wonder how much these golf ball companies lose to these recycle golf ball companies. That's once less person buying from them. It's like the used video game market compared to buying it brand new.
12/9/10
 
rmumph1 says:
I guess they figure golf may die out eventually but drinking will never go away.
12/9/10
 
Mortalsword says:
In a "Recession" Alcohol is generally the only product who's sale's go up.
12/9/10
 
Trav says:
If you folks predicting a PE buyout are right, watch out for the brand if they follow the privatr equity MO of increasing debt, especially in a shrinkng product market. If we consumers are lucky, an operating company like UnderArmor with a growing brand and seeking to enter the golf market will get it. Kevin Plank has been active in various golf events around town.
12/9/10
 
Tee it High. says:
Trav - I love Under Armour and think it would be great but there is no way that they can afford Acushnet. Acushnet has annual revenue of $1.2 billion, Under Armour made $328 million last year.
12/9/10
 
cpercy says:
Pro V1's are my favorite ball to find in the woods. And by the way thanks to whomever it is that is keeping me supplied, I love you guys.
12/10/10
 
tennesseeboy says:
@cpercy - It's me and you're welcome. By the way, there's a lot more in the lake.
12/10/10
 
Trav says:
@ TeeitHigh - You could well be right, maybe this is too much for them to bite off, and too soon, but I think they have considerable debt capacity (especially if Acushnet cash flow will support financing), and the seller might provide financing. Or maybe they could line up other junior investors who would look to UA to provide the operating skills.

Perhaps wishful thinking about UA, but others like UA on the edge with more heft might like to get in. Hey, I'm starting to dream about it putting something together myself.
12/11/10
 
Stevens24 says:
Tee it high you are slightly off in you valuation UA made 328 million in the 3rd quarter they have annual revenue of over 1 billion. Plus much of the sale of Acushnet will be swallowing debt rather than cash. You have no anitrust issues and it makes logical sense since Adidas, Nike and Puma have golf divisions.
12/31/10
 
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