South Korean fashion firm F&F Co., known for sportswear brand MLB and outdoor brand Discovery, will join Centroid Investment Partners in a takeover of TaylorMade Golf Co., a California sponsor of Tiger Woods golf equipment, with an investment of 400 billion won ($ 347 million).
According to several sources in the investment banking sector, F&F confirmed on Monday that it had decided to partner with Centroid private equity to acquire TaylorMade Golf. As a strategic investor, the Korean fashion company will invest 300 billion won in equity and the remaining 100 billion won in mezzanines for a 49% stake in a project fund to be created for the acquisition of TaylorMade. F&F plans to release the details later Tuesday.
F&F shares were trading up 5.01 percent to 566,000 won on Tuesday morning.
The buyer is also considering inviting other private equity funds to invest in mezzanines after the deal closes, an unnamed official in the investment banking industry said.
Discussions between F&F and Centroid gathered pace over the weekend when F&F Chairman Kim Chang-soo and Centroid CEO Jeong Jin-hyeok met in person for negotiations. F&F was eager to participate in the acquisition as Centroid needed funds.
The Nature Holdings, a local importer of popular clothing brands National Geographic and Jeep that was seen as a strong strategic investor candidate, decided not to join the takeover.
F&F, listed on Kospi, posted a market cap of 4.1 trillion won on Monday, about eight times higher than The Nature Holdings at 551.2 billion won.
F&F – founded in 1992 – is known for the popular brands Discovery, MLB and MLB Kids. It also owns the Banila Co. cosmetics brand. Its president and founder Kim has elevated the business by selling clothing from overseas brands including Benetton and Renoma Sports at home.
Last year, F&F raised 122.5 billion won in operating income from sales of 837.6 billion won on a consolidated basis. The company announced a decision to split into shares in November last year and is currently split between fashion operator F&F and holding company F&F Holdings. The two companies were newly listed on May 21.
Centroid, meanwhile, decided to buy TaylorMade for 2,000 billion won. Of the total, it plans to secure 1,000 billion won through bank and brokerage loans, 450 billion won through mezzanine investments and the remaining 610 billion won through equity investments.
MG Community Credit Cooperatives will participate as a lead investor and review more than 350 billion won of equity and mezzanines.
Centroid private equity will be able to complete its acquisition of TaylorMade Golf early through its partnership with F&F, an anonymous industry official said, possibly next month.
By Kang Doo-soon, Kang Woo-seok and Lee Eun-joo
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