Following the announcement that Fortune Brands is to sell off all of its golf division http://www.golfbusinessnews.com/news/corporate/acushnet-business-sold/ well over twenty potential bidders have looked at buying the business.
In 2010 the division, which includes Titleist and FootJoy, had revenue of $1.24 billion and operating income of about $80.2 million. Sources say the division had about $100 million in cash flow last year, which could give it a valuation of about $800 million to $1 billion.
Earlier this week Fortune’s chief executive officer, Bruce Carbonari, told the Reuters Food and Agriculture Summit that he expects a lot of takeover interest.
“There are really four groups of people that we believe will be part of the process — we think it will be a robust process,” Carbonari said in Chicago.
Aside from strategic players, which could include Nike Inc. or Adidas and private equity firms, Carbonari said he expects interest from Asian or Middle Eastern sovereign investors and high net-worth individuals.
Also mentioned by some is Roger Cleveland Golf Co, owned by SRI Sports. More than two dozen potential bidders have looked at the business, said one source.
“This is a very unusual asset. There are people out there who have a real passion for the game,” Carbonari said before going on to say that he expected all existing employees to stay with the business.
After the sale Fortune Brands, which also makes alcoholic drinks such as Jim Beam bourbon, is expected to concentrate on this business, which is based half in the United States and half internationally.
Acushnet www.acushnetcompany.com