Acushnet bought by fila-korea

[jmvargas]

i do not think it was a matter of acushnet being unprofitable---nobody will shell out $1billion+ for an unprofitable company...

the parent company--fortune brands--made a strategic decsion to return to its core business and are also unloading its other non-core business assets.....

[golflifer]

[quote name='Bob57' timestamp='1306025118' post='3252730']
Certainly the management team has very little to do with the design of the clubs, balls, shoes, etc. etc... I would think they and their inflated salaries would be the first to go (reducing structural costs) if they wanted to make the division profitable. Would make sense to golden parachute them within a year.
[/quote]

It is profitable currently....operating income around 80-90 million yearly

[bppry]

Whats with the fear of an out of country owner? Other than Callaway and, If you want count Nike, who isn't? Taylormade is adidas-saloman, cleveland is srixon, but none are actually made from start to finish here anyways, yes scratch will soon. some small market share companies are still US based but golf is such a global game. As long as a titleist latitude doesn't come out it will be fine.

[nakedmike]

[url="http://www.youtube.com/watch?v=Ptyzc4BQliY"]http://www.youtube.c...h?v=Ptyzc4BQliY[/url]

KOREA IS A NUMBA 1!(*#*$(#!%#(* LOLOL

-Mike Kim

[Bob57]

[quote name='golflifer' timestamp='1306028276' post='3252853']
[quote name='Bob57' timestamp='1306025118' post='3252730']
Certainly the management team has very little to do with the design of the clubs, balls, shoes, etc. etc... I would think they and their inflated salaries would be the first to go (reducing structural costs) if they wanted to make the division profitable. Would make sense to golden parachute them within a year.
[/quote]

It is profitable currently....operating income around 80-90 million yearly



[/quote]

Hardly that is why Fortune Brands wanted to dump them. Many ways you can "cook" the books to make a division look better than it is for potential sale. The balls are profitable but the rest were not. They were taking too much development money from the parent company. Now look for Fortune Brands to be sold to a huge international liquor conglomerate.

[18th Legion]

[quote name='Seth Pistol' timestamp='1305945939' post='3251102']
[quote name='sooperstring' timestamp='1305943417' post='3250994']
[quote name='mr_divots' timestamp='1305926100' post='3250437']ma
With all due respect, how is NOTHING being owned by American companies any longer a good thing, regardless of manufacturing locale? This is much like INBEV purchasing Budweiser and leaving NO Domestically-owned large-scale breweries. How much control of our consumer experience and daily lives need be controlled by foreign interests? Globalization and the shareholder profits before all else mantra has ruined a LOT in America. I think Titleist as we know it will continue, but foreign capital investors will now get to make that call. Not good in my opinion, but the way of the world.
[/quote]

I'm still confused.

When you start talking about companies with a market cap north of $1bn, it's weird to even talk about a locus of ownership.

Would you rather they be bought by Nike, an organization where 80% of the company is owned by over 800 institutional investors? Or Under Armour, where those numbers are 79% and 225, respectively? Given that Fila is going to keep the same CEO, the same location in MA, and basically just leverage the Titleist brand to profit from the growing golf market in Asia, I'm not sure why you care about where the profits go.

You cite INBEV purchasing Budweiser. I live in central Ohio - there's still a Budweiser brewery that I drive by weekly, so I can testify first hand that it's not suddenly being made in a series of Vietnamese bathtubs. I haven't noticed any serious change in quality, packaging, quantity or price. Heck, if anything, they've been using the exact same marketing for a decade. How has your "consumer experience" been altered by that purchase?

I can't relate to the unease about these "foreigners", as if there's a difference if Deutsche Bank buys an American brand, instead of Morgan Stanley. If you'd prefer the companies you patronize to be privately owned, I suppose there might be some argument to be made, though that boat probably sailed about 90 years ago. In the end, the pointless dislike of people who live 4,000 miles away instead of 1,500 just reeks of xenophobia, not genuine concern about any kind of consumerism.


[/quote]

very well said. and honestly, so many global businesses are now decentralized and its honestly extremely difficult to say a company is "american". look at a brand like GE.

as many of the press releases have stated, FILA doesn't plan to make any changes with Acushnet for the immediate future. why would they?

finally, FILA has made a push in the last few years in the golf and tennis industries, especially tennis. the brand is starting to make a strong comeback. my store carries FILA product and their stuff is good quality stuff. very clean and traditional but high quality stuff.
[/quote]

Good points through and through. Most of us understand Multi-national corporations.
However . . . what protections exist today can be gone tomorrow. It isn't that Korean ownership of Acushnet will take jobs (Maybe not many) or will make a difference in the product, or doesn't change where the product is produced.
It does speak to the U.S. inability to own, operate, or build anything, anymore. U.S. ownership does come with certain philosophical advantages.

In time, and in the future, a lack of domestic ownership or manufacturing will continue to make us weak and vulnerable to outside influences. Sure, maybe it's too late. It is much easier for foreign ownership to simply decide to “shut down” businesses. Yes I know, our own automakers have shut down plants over the past few years. The difference is that there are legal hurdles that must be addressed.

Look, it isn’t that anything to do with golf will signal the end of American dominance. American dominance is long past. This is however part and parcel of a greater problem. You will all here a greater outcry for Relocalization. Whether it be food, or clothing, or manufacturing. Domestic ownership can or may respond to our needs, foreign ownership is under no requirement to do so, either legally, ethically, or philosophically.

Ask yourself, as a Titleist player, regardless of where the heads were made, did it make you feel better to know that Acushnet was an American owned company? If it doesn't matter, well, you’re in allegiance with the top 1% wealth of this country.

[sooperstring]

[quote name='18th Legion' timestamp='1306053852' post='3253371']
Good points through and through. Most of us understand Multi-national corporations.
However . . . what protections exist today can be gone tomorrow. It isn't that Korean ownership of Acushnet will take jobs (Maybe not many) or will make a difference in the product, or doesn't change where the product is produced.
It does speak to the U.S. inability to own, operate, or build anything, anymore. U.S. ownership does come with certain philosophical advantages.

In time, and in the future, a lack of domestic ownership or manufacturing will continue to make us weak and vulnerable to outside influences. Sure, maybe it's too late. It is much easier for foreign ownership to simply decide to "shut down" businesses. Yes I know, our own automakers have shut down plants over the past few years. The difference is that there are legal hurdles that must be addressed.
[/quote]

I guess this is the fear that everyone has - that lack of domestic manufacturing base is going to somehow make us, in unspecified ways, vulnerable to some shady international cartels like OPEC. But, first, I think it's important to point out that the US still has a huge manufacturing base and they're getting stronger, not weaker. The XLI index fund (composed of companies like Boeing and Caterpillar, both based in Illinois, and other manufacturing companies) has had double the growth of the S&P 500 since 2009. The issue is that manufacturing in the US no longer means textiles and disposable toys, it means computer chips and semiconductors (world's #1 manufacturer).

Also, automakers are an awesome example that works against exactly what you're afraid of. Domestically owned companies like Ford and GM, have been gradually moving their manufacturing out of the US to save costs. The fact that it's an "American" company (again, as the previous examples, they're mostly owned by institutional investors) hasn't stopped it. Meanwhile, Toyota has been moving manufacturing TO the US, even though they're not. Companies move their production to wherever they can maximize profits. This is always going to be true, and has nothing at all to do with location.

[quote name='18th Legion' timestamp='1306053852' post='3253371']
Look, it isn't that anything to do with golf will signal the end of American dominance. American dominance is long past. This is however part and parcel of a greater problem. You will all here a greater outcry for Relocalization. Whether it be food, or clothing, or manufacturing. Domestic ownership can or may respond to our needs, foreign ownership is under no requirement to do so, either legally, ethically, or philosophically.

Ask yourself, as a Titleist player, regardless of where the heads were made, did it make you feel better to know that Acushnet was an American owned company? If it doesn't matter, well, you're in allegiance with the top 1% wealth of this country.
[/quote]

Well, first, let's again point out: Fortune brands, previous owners of Acushnet, are 77% owned by institutional investors. So as with all the other companies we're talking about, the idea that "America" is losing a company is sort of odd.

But even beyond that, it didn't make me feel any better to know that Acushnet was primarily owned by large financial institutions that happen to be based in New York, using loads of foreign capital. Because, seriously, is there anyone left alive who thinks that large investment banks are looking out for the average American?

[dalehead]

Institutional investors. Scary buzz words for evil capitalistic cabals working behind the scenes to cheat the poor working man out of his hard earned money.

Investment banks. Another buzz word. But firms like Goldman Sachs and JP Morgan are actually small potatoes in the institutional investor class. And if you want to take some of their "evil" profits away from them, buy their stock and donate the money you make to charity.

And if you are worried about the influx of "foreign capital" you should be more concerned about the billions of dollars being invested in our treasury notes by countries whose interests may not align with ours.

The big players among institutional investors include insurance companies who are trying to make money to pay your next claim. Mutual funds who are trying to make money for individual investors. And state and local government, private pension and 401k plans trying to make the money you will need in your retirement.

So no, I am not bothered by how much of Fortune Brands, or any other companies are owned by "institutional investors". And you should not be bothered either. At least not if you look at it from an informed perspective.

[littleprov1x]

Agreed with Dalehead- You say Nike is owned by 70%+ "institutional investors." Did you see who the top institutional holder is? Capital Group. Aka, American Funds. Whose the 4th largest holder of Nike? Fidelity. #5? Vanguard. I would bet that almost every person on this board who has some sort of 401(k) or pension owns mutual funds, directly or indirectly, by one of those three institutional investors. Similar pattern over at Fortune Brands. These are US-based institutional investors with primarily US-based dollars. Institutional investors are not some evil foreign conduit, but rather stable capital made up of retirement savings, insurance money, etc. from a lot of individuals.

[hef63303]

[quote name='Bob57' timestamp='1306042702' post='3253277']
[quote name='golflifer' timestamp='1306028276' post='3252853']
[quote name='Bob57' timestamp='1306025118' post='3252730']
Certainly the management team has very little to do with the design of the clubs, balls, shoes, etc. etc... I would think they and their inflated salaries would be the first to go (reducing structural costs) if they wanted to make the division profitable. Would make sense to golden parachute them within a year.
[/quote]

It is profitable currently....operating income around 80-90 million yearly



[/quote]

Hardly that is why Fortune Brands wanted to dump them. Many ways you can "cook" the books to make a division look better than it is for potential sale. The balls are profitable but the rest were not. They were taking too much development money from the parent company. Now look for Fortune Brands to be sold to a huge international liquor conglomerate.
[/quote]
Fortune Brands is a huge multinational liqour comglomerate.

[paulchung]

If lacoste bought titleist, that would have been a great synergy.

[BraveAnthony]

This is what I read from Korean papers and some people I know on the wall street.

First of all, $1.2 billion is a lot for a company that nets $80-90mil a year.
There were a few other bidders. Adidas and a Chinese retail conglomerate that owns 1000 stores in Asia.
Fortune wanted to get the top dollar but also wanted to sell to someone who can take acushnet to the next level. Heard adidas' bid was higher but fortune decided to sell to fila.
Yoon, the CEO of Fila Korea, who was the man behind all the success for the last 20 years said in an interview that he would keep the acushnet unchanged but would back it up with more $ for R&D. He will also leverage Fila's 500 distribution channels in Asia and especially in China where golfing population is growing by 30% every year. There are 54 million golfers in china alone.
What does that mean? More sales, more profit, more quality goods, and a lot more happy golfers. I expect asia only titty irons and drivers just like how TM and Ping offer Asia only equipments.
Asians really dig for good forged irons and tourstage has the biggest market share due to it's superior feel with mizuno trailing close second. Titleist is the best contender, IMO. Surprisingly it's really hard to buy titleist irons in Asia. Acushnet must have done a poor job finding right distributors or didn't wanna spend money in marketing. I think it was a good deal for both fortune and fila.
Yoon also said he would like to grow Pinnacle line of balls but didn't mention about scotty or vokey.

[dalehead]

[quote name='BraveAnthony' timestamp='1306131366' post='3255326']
This is what I read from Korean papers and some people I know on the wall street.

First of all, $1.2 billion is a lot for a company that nets $80-90mil a year.
There were a few other bidders. Adidas and a Chinese retail conglomerate that owns 1000 stores in Asia.
Fortune wanted to get the top dollar but also wanted to sell to someone who can take acushnet to the next level. Heard adidas' bid was higher but fortune decided to sell to fila.
Yoon, the CEO of Fila Korea, who was the man behind all the success for the last 20 years said in an interview that he would keep the acushnet unchanged but would back it up with more $ for R&D. He will also leverage Fila's 500 distribution channels in Asia and especially in China where golfing population is growing by 30% every year. There are 54 million golfers in china alone.
What does that mean? More sales, more profit, more quality goods, and a lot more happy golfers. I expect asia only titty irons and drivers just like how TM and Ping offer Asia only equipments.
Asians really dig for good forged irons and tourstage has the biggest market share due to it's superior feel with mizuno trailing close second. Titleist is the best contender, IMO. Surprisingly it's really hard to buy titleist irons in Asia. Acushnet must have done a poor job finding right distributors or didn't wanna spend money in marketing. I think it was a good deal for both fortune and fila.
Yoon also said he would like to grow Pinnacle line of balls but didn't mention about scotty or vokey.
[/quote]

Regarding a couple of your points.

A net of $80-90 million is only one part of the balance sheet story, but in any case its more important what a company can make in the future than what they have made in the past. I think that was a large factor in the final purchase price.

Regarding Vokey and Cameron not getting a shout out, remember their reputation in the US is built on their work with PGA tour players. Don't know how much of a factor they are in Asia. Get some Vokey wedges and a Scotty in KJ's bag and watch out!

[whchoclte]

I think this is a great move for the Titleist brand. Grabs them a more youthful audience, plus additional R&D without sacrificing tradition, lets hope.

Personally the Scotty brand to me is a brand on its own, not really associated with Titleist. Titleist would benefit from buying a company like Rife and putting its name behind those putters.

As for Vokey its almost the same thing. These names have gotten so big that they lose teh name Titleist. I dont say i play a titleist wedge. I say I play a Vokey wedge or spin milled.

Titleist can easily make a great wedge with the likes of a cleveland, mizuno callaway.

Now would be the perfect time to make that happen.

[Tailgate]

[quote name='whchoclte' timestamp='1306331459' post='3261257']
I think this is a great move for the Titleist brand. Grabs them a more youthful audience, plus additional R&D without sacrificing tradition, lets hope.

Personally the Scotty brand to me is a brand on its own, not really associated with Titleist. Titleist would benefit from buying a company like Rife and putting its name behind those putters.

As for Vokey its almost the same thing. These names have gotten so big that they lose teh name Titleist. I dont say i play a titleist wedge. I say I play a Vokey wedge or spin milled.

Titleist can easily make a great wedge with the likes of a cleveland, mizuno callaway.

Now would be the perfect time to make that happen.
[/quote]


At this point, they make plenty of money off of those divisions. Scotty appears to run as a subsidiary, which can be quite beneficial if they can stay hands off. Vokeys are a great thing for Titleist because of the name recognition you mention. It doesn't matter whether the end user knows who the manufacturer is or not when they walk into the golf shop and ask for Vokey wedges, the salesman knows what to hand him.

[18th Legion]

[quote name='BraveAnthony' timestamp='1306131366' post='3255326']
. . . I expect asia only titty irons and drivers just like how TM and Ping offer Asia only equipments . . .
[/quote]

Titleist and Vokey already have Japan only releases. You can check them out at TourspecGolf.

[Seth Pistol]

the $80-$90M number was only for 2010. that number included the profit from the sale of Cobra to Puma. i believe the 2009 number was in the $30M range.

[storm3]

[quote name='BraveAnthony' timestamp='1306131366' post='3255326']
First of all, $1.2 billion is a lot for a company that nets $80-90mil a year.

[/quote]

facebook had revenues of around $2 bil last year(operating income was much less) yet they are being valued at over $50 bil. It is rare that an industry leader would sell for less than or equal to their annual revenue.

[storm3]

[quote name='Seth Pistol' timestamp='1306378960' post='3263363']
[size=2]the $80-$90M number was only for 2010. that number included the profit from the sale of Cobra to Puma. i believe the 2009 number was in the $30M range.
[/quote][/size]
[size=2]
[/size]
[size=2]From the Wall Street Journal:[/size]

[size=2][color=#291200][size=2][font="Arial"][size=2]
[/size][/size][/font][/color][/size]
[size=2][color=#291200][size=2]"The golf division’s revenues in 2009 by contrast were $1.2 billion and its operating income contribution was $91.5 million."[/size][/color][/size]
[size=2][color=#291200][size=2]
[/size][/color][/size]
[size=2]Also keep in mind that that $80-90 mil is very good for this industry right now. Callaway has reported over $20 mil losses for the past 2 years. [/size]

[Ozsouthpaw]

[quote name='bppry' timestamp='1306030818' post='3252964']
Whats with the fear of an out of country owner? Other than Callaway and, If you want count Nike, who isn't? Taylormade is adidas-saloman, cleveland is srixon, but none are actually made from start to finish here anyways, yes scratch will soon. some small market share companies are still US based but golf is such a global game. As long as a titleist latitude doesn't come out it will be fine.
[/quote]
Fyr adidas kept TM from the Salomin acquisition and sold Salomin to Wilson Sports

[drew030303]

I dont think 1.2 billion is unreasonable...Valuations can be done a million different ways, EBITDA being one way, which can be dangerously misleading...if we focus on their operating income of 91.5 million and take a multiple of 7-8 times, that equates to 630-720 million...factor in growth potential in Asia, (which in my opinion was a big reason Fila paid 1.2b) and goodwill (Titleist is a very recognizable brand) then the price seems reasonable. As another poster mention, the golf industry is growing around 30% per year in China, which has a population of 1.3 billion, and 54 million already golfers, so I believe Fila will do very well in the years to come...I think 1.2b was a fair price.

[J13]

[quote name='paulchung' timestamp='1306123636' post='3255165']
If lacoste bought titleist, that would have been a great synergy.
[/quote]


Agreed.

[NWS Alpine]

[quote name='J13' timestamp='1306414360' post='3263881']
[quote name='paulchung' timestamp='1306123636' post='3255165']
If lacoste bought titleist, that would have been a great synergy.
[/quote]


Agreed.
[/quote]

I don't like pastel colored golf clubs...

[tbowles411]

[quote name='NWS Alpine' timestamp='1306416005' post='3263934']
[quote name='J13' timestamp='1306414360' post='3263881']
[quote name='paulchung' timestamp='1306123636' post='3255165']
If lacoste bought titleist, that would have been a great synergy.
[/quote]


Agreed.
[/quote]

I don't like pastel colored golf clubs...
[/quote]
**SHIVERS**

[Herm33]

[quote]
[quote name='hef63303' timestamp='1306112989' post='3254715']
Hardly that is why Fortune Brands wanted to dump them. Many ways you can "cook" the books to make a division look better than it is for potential sale. The balls are profitable but the rest were not. They were taking too much development money from the parent company. Now look for Fortune Brands to be sold to a huge international liquor conglomerate.
[/quote]
Fortune Brands is a huge multinational liqour comglomerate.
[/quote]


Actually there are quite a few multinational liquor conglomerates that are much larger than Fortune/Jim Beam Brands. My dad is about to retire from Jim Beam later this year and is fairly certain that after this all settles that Fortune will sell out to the highest bidder.

[neilc]

Titleist are not considered that high end out here in asia.

especially in wedges where Forged Japanese versions are very popular.

Cast Vokeys @ $170 dont really interest the higher end guys?

[jmvargas]

[quote name='neilc' timestamp='1306845308' post='3274470']
Titleist are not considered that high end out here in asia.

especially in wedges where Forged Japanese versions are very popular.

Cast Vokeys @ $170 dont really interest the higher end guys?
[/quote]

+1....i cannot think of any american brand that would be considered high end in my country.....

now japan spec clubs especially forged---that's another story...

........honma,miura, epon, fourteen, s-yard,beres, tourstage, yonex and even maruman---that's high end!!....JMHO..

[amrivew]

I just feel like my 910 may be the last Tity I'll be able to wrap my head around

[daniel32293]

i will never wear anything titleist or buy anything titleist if they put a fila logo on it... fila is the laughing stock of american products only scums wear fila i will refuse to put forth any money if fila starts incorporating itself with titleist and footjoy on its products

[fearnobogey]

[quote name='whchoclte' timestamp='1306331459' post='3261257']
I think this is a great move for the Titleist brand. Grabs them a more youthful audience, plus additional R&D without sacrificing tradition, lets hope.

Personally the Scotty brand to me is a brand on its own, not really associated with Titleist. Titleist would benefit from buying a company like Rife and putting its name behind those putters.

As for Vokey its almost the same thing. These names have gotten so big that they lose teh name Titleist. [b]I dont say i play a titleist wedge. I say I play a Vokey wedge or spin milled.[/b]

Titleist can easily make a great wedge with the likes of a cleveland, mizuno callaway.

Now would be the perfect time to make that happen.
[/quote]

Thats a fair point. The only time Vokey and Cameron are really classified as Titleist is when someone is talking about a bag setup. "I'm all Titleist."