Titleist IPO Aims for Green

Titleist IPO Aims for Green – Brett Hershman The Golf Industry is about to undergo some massive restructuring. Last month it was announced that Adidas is moving forward selling their Golf Segment, including Taylor-Made, one of the biggest equipment brands in golf. Some Top analysts have been down on the golf equipment business and have advocated me to steer clear of the industry. Amid all the negativity surrounding the golf industry in the past month, some of the biggest news for the game broke last week. Golf Equipment manufacturer and leader Titleist announced its plan to move forward with an IPO, expected to launch later this year. Titleist parent company Acushnet is preparing to register for an IPO expected to be valued as high as $2 Billion. Acushnet produced more $200M in EBITDA in the past 12 months and has been working with Investment Banks JP Morgan, UBS, and Nomura Holdings for the IPO. Acushnet also owns Footjoy, a leader in the golf shoe space. Despite the struggling golf equipment industry, the Acushnet IPO suggests that the golf ball and apparel market remains strong amid weak golf club sales. Titleist has been the number one ball in golf for decades; golf balls and shoes are considered consumable goods with a much higher turnover sales rate than golf clubs, which are considered durable goods. The Titleist IPO will be an important gauge of the golf industry as a whole, and will be the 2nd major golf brand to be traded publicly along with Callaway golf (ELY). Callaway has been performing well this year, and has successfully diversified their business with a key stake in Top Golf, a growing golf entertainment venue that launched their flagship location on the Las Vegas strip this month. The golf equipment industry is an $8.7 billion dollar business, with the US accounting for 41 percent of sales while Japan and South Korea were second and third in sales with 24 percent and 7.1 percent, respectively. With Golf entering the Olympics this year in Brazil, it will be a big opportunity to increase its exposure internationally and attract a fan base that may not otherwise be exposed to the game.