L.A.B. Golf sold to private equity firm

[MickeyTankBank]

All the LAB fanboys in here

[jda]

I cannot see the WSJ article without paying, but did it say that the company had a valuation of $200 million, or that $200m was paid for the stake?

 

Another source said a $200m valuation.

[rooski]

1 hour ago, Pnwpingi210 said:

Yeah…..200 million is …. A lot for a putter only company

 

Maybe I'm naive as I only really ever look at private equity and acquisitions within the software-as-a-service space which has unreal valuations, but I would have thought L.A.B would be worth a lot more than that

Edited July 29 by rooski

[rsballer10]

3 hours ago, Pnwpingi210 said:

I think  doing what you suggesting (making lab more like taylormade) would be scenario number 2, and a bad idea.  
 

let lab be lab.  Sure you can find efficiencies, but not at an impact to what makes lab be lab.

I think the zt is great as a grab an go option.  Labs things is custom fitting.

 

I meant ZT as zero torque, not the taylormade specific model. 

[Pnwpingi210]

9 minutes ago, rsballer10 said:

I meant ZT as zero torque, not the taylormade specific model. 

Got it

[mushkie11]

37 minutes ago, rooski said:

 

Maybe I'm naive as I only really ever look at private equity and acquisitions with the software-as-a-service space which has unreal valuations, but I would have thought L.A.B would be worth a lot more than that

Odyssey was bought for 130 Millie in 97. Worth close to a Billie now! 

[gator022]

40 minutes ago, rooski said:

 

Maybe I'm naive as I only really ever look at private equity and acquisitions within the software-as-a-service space which has unreal valuations, but I would have thought L.A.B would be worth a lot more than that

From article….

 

“L Catterton, the private-equity firm backed by luxury-goods giant LVMH  , has bought a majority stake in L.A.B. Golf at a valuation of over $200 million, people familiar with the matter said.”

[erock9174]

55 minutes ago, rooski said:

 

Maybe I'm naive as I only really ever look at private equity and acquisitions within the software-as-a-service space which has unreal valuations, but I would have thought L.A.B would be worth a lot more than that

If you think about it though. What do they really own other than IP. They source all their components from other companies. So it’s basically an assembly shop. How many people do they even employ. $200m to me sounds high  

Edited July 29 by erock9174

[birdiestobogeys]

Valuation seems low to me. Article claims they should do 390k units this year. Not sure mix between wholesale and DTC but maybe say average selling price is conservatively $300. That would put revenue at $115 million could be much higher if custom DTC builds is a larger share of mix. Acushnet trades at 2.5x sales. And LAB should have a higher multiple given its growing way faster. $300m seems like low end. Either PE just got a great deal or these numbers are way off. 

[SLP1967]

Sounds like a great deal for the LAB guys. They are at all time high, they are getting knocked off by every other OEM.  They are kind of a one trick pony, i would have been a seller too. When the price is right, its time to sell....

 

FWIW, I have a used a LAB for the last 18 months and think it is the best putter that I have used.  

[FredCouplesFan]

Feel like this was the only way for things to go. Great product but they are a one trick pony. Good for them cashing in on it.

[TiScape]

A Louis Vuitton branded OZ.1i… Now I’d buy that! 😊

 

 

[snagy2000]

1 hour ago, gator022 said:

From article….

 

“L Catterton, the private-equity firm backed by luxury-goods giant LVMH  , has bought a majority stake in L.A.B. Golf at a valuation of over $200 million, people familiar with the matter said.”

Does the article state the PE's majority was valued at $200m or the LAB's valuation was $200m? 

Edited July 29 by snagy2000

[Tyrick24]

5 hours ago, shackmangolf said:

I am excited for LAB. L Catterton will bring the needed expertise they lack. I've been part of teams that have sold several companies to PE and know L Catterton very well. 

 

Personally, I think LAB was lucky to sell now. The golf boom will wind down. LAB will lose its luster. They will be copied through the yin yang. They probably got the best valuation they could possibly get. 

 

As a person who has purchased many putters from LAB as a fitter, I believe they needed the expertise that L Catterton can give. LAB's processes leave a lot to be desired. They are very slow to fulfill orders. Dealers have to pre pay. Their entry into mass retail pissed off a lot of the retailers that made them successful. It's hard to be a LAB customer - "give us $800 for a putter now and maybe you will get it in 10 weeks".

 

PE will help them. The lead times will go down. The customer service will go up. The brand will grow. Everything will be better. PE isn't bad - it's actually good for companies like this. 

 

My two cents.

Dealers don't have to pre pay. Source - I am one.

[gator022]

24 minutes ago, snagy2000 said:

Does the article state the PE's majority was valued at $200m or the LAB's valuation was $200m? 

That is a direct quote above. They bought a majority and the company was valued at $200mm.

[snagy2000]

10 minutes ago, gator022 said:

That is a direct quote above. They bought a majority and the company was valued at $200mm.

So they paid at minimum a little over $100 million, possibly more depending on the percentage purchased, for their majority stake. 

[bk3318]

1 hour ago, TiScape said:

A Louis Vuitton branded OZ.1i… Now I’d buy that! 😊

 

 

LV headcover

[SoCalTitleist]

Private equity the kiss of death 

[putt_for_dough]

58 minutes ago, SoCalTitleist said:

Private equity the kiss of death 

Private equity is *sometimes* the kiss of death for brands that come to popularity/utility/value through expensive means of manufacturing (eg handmade) and/or expensive raw materials...but L.A.B. is neither of those. They use cheap materials that are sourced from outside the company, and they simply package them together for us to buy. It's not expensive (despite what they say) to balance the putters or automate the balancing process, either.

 

L.A.B. will grow to the point that everyone who wants one will have one (either new or used), and then they'll probably turn into another random putter that blends in on the rack. The big brands will slowly get more and more of the putter market share back from L.A.B., and it'll be back to the status quo until the next new thing comes along....

 

I don't see any way that private equity is going to be the kiss of death for L.A.B. If anything, it's going to help them grown and reach more customers, more quickly. I don't foresee drops in quality or anything of the sort. They'll probably expand their product line, and that'll be awesome, too.

 

I could also be very wrong...but we will see, soon enough

[JungleJimbo]

 

 

[manVSgolf]

5 minutes ago, JungleJimbo said:

 

 

Encouraging.  

[Frank_Kasule]

Good for Lab, I'm sure the company will grow and they deserve their money. 

[golferdude54]

Deleted

Edited July 29 by golferdude54

[3puttavoidance]

So if Louis Vuitton is anything to go by we will soon see production outsourced to Chinese artisans and a firm denial 🤣🤣

[manku]

I'm not a huge PE fan, but they didn't do a bad job with Acushnet aka Titliest/Footjoy.

 

Those who bought the stock after the IPO are up nearly 400% in the last decade...not too shabby.

[AlpineGolf]

6 hours ago, gator022 said:

That is a direct quote above. They bought a majority and the company was valued at $200mm.

 

Financial journalists rarely get this right. Most of the time, official deal values are enterprise values on a cash-free, debt-free basis, rather than equity values of specif stakes acquired. For startups, that usually ends up being pretty close to the overall equity value, since they typically don’t have much, if any, debt.

 

7 hours ago, birdiestobogeys said:

Valuation seems low to me. Article claims they should do 390k units this year. Not sure mix between wholesale and DTC but maybe say average selling price is conservatively $300. That would put revenue at $115 million could be much higher if custom DTC builds is a larger share of mix. Acushnet trades at 2.5x sales. And LAB should have a higher multiple given its growing way faster. $300m seems like low end. Either PE just got a great deal or these numbers are way off. 

 

I’m having a hard time buying the idea that LAB can scale to 390,000 units per year. Reports indicate they produced around 130,000 units last year, and projecting a 3x increase for 2025 seems pretty ambitious given the underlying requirement to scale production (putters aren’t software...). For an equipment manufacturer, I’d typically expect normalized EBITDA margins in the 10–20% range. LAB may be on the lower end, given its earlier stage, but for valuation purposes, let’s assume a normalized margin.

 

If we take the unit volume and average selling price at face value and use an average case, we land somewhere between $4 million and $23 million in stabilized EBITDA—the former being the low end (lower margin x 2024E sales), and latter the high end (higher margin x 2025E sales). Let’s split the difference and use $14 million as a base case. Assuming the reported $200m enterprise value is accurate, that implies an EBITDA multiple north of 14x. Is that high or low compared to comps? It depends—but that’s definitely rich, especially for a niche player.

 

To be clear, I fully recognize this is a growth PE transaction. However, the TAM (total addressable market) is inherently limited, and the business doesn’t offer the kind of scaling potential you’d see e.g. in a typical tech investment.

 

Yes, the growth story helps justify a premium, but having spent the past decade in private equity, I can say institutional investors are typically wary of "one-trick ponies." Revenue concentration, trend/fad risk, and lack of product diversification are real concerns.

LAB is heavily reliant on one innovation—zero torque putters. Larger competitors offer a broader lineup and are better insulated from shifts in consumer trends. If the novelty fades or zero torque falls out of fashion, sales could drop off sharply. Competitors moving into the ZT space could put pressure on prices.

 

So, even if we accept the current estimates and assumptions, this valuation doesn’t look cheap—especially given the execution risk and uncertainty.

 

Edited July 29 by AlpineGolf

[Red4282]

We might actually see a flip here, LAB fanboys ditching the brand and haters joining up… lol

[dcmidnight]

1 hour ago, AlpineGolf said:

I’m having a hard time buying the idea that LAB can scale to 390,000 units per year.

 

I'm having a hard time believing the market is there for close to 400,000 units a year. Its got to be the most bought and sold item in the BST right now. If you want one, you can pick one up cheap as heck, try it out and sell it a week later for what you paid for it. Do they really think the market is there for $500-800 putters? I guess they must.

[dekez]

9 hours ago, birdiestobogeys said:

Valuation seems low to me. Article claims they should do 390k units this year. Not sure mix between wholesale and DTC but maybe say average selling price is conservatively $300. That would put revenue at $115 million could be much higher if custom DTC builds is a larger share of mix. Acushnet trades at 2.5x sales. And LAB should have a higher multiple given its growing way faster. $300m seems like low end. Either PE just got a great deal or these numbers are way off. 

WSJ said they sold 130K units last year

[SnowbirdTom]

I'm glad I bought mine last fall while they were pure LAB.  Don't think I've ever seen a PE venture turn out good for the acquired people.

 

Or customers.

Edited July 29 by SnowbirdTom