SBD/Issue 124/Finance

Acushnet Reaches Agreement To Sell Cobra Golf Brand To Puma

 

Acushnet Company yesterday announced it has reached an agreement to sell Cobra Golf to Puma AG. Financial terms of the transaction were not disclosed. The sale includes the Cobra brand as well as related inventory, intellectual property and endorsement contracts. Cobra endorses golfers Camilo Villegas and Ian Poulter, among others. Acushnet also announced plans to continue to provide Cobra services for an agreed upon period of time beyond the closing of the sale. The sale is expected to take effect by early in the second quarter. Acushnet will conduct all Cobra business until that time (THE DAILY). GOLF WORLD's E. Michael Johnson wrote the deal "makes sense" for Acushnet. When Acushnet parent company Fortune Brands purchased Cobra in '95 for $700M, the "idea was for Cobra to become the flagship club brand while Titleist and FootJoy would continue to have a stronghold on balls, shoes and gloves while producing clubs aimed almost exclusively at low-handicappers." Cobra "enjoyed some success in the club-category," but Titleist-branded clubs have, "in recent years, presented more attractive offerings appealing to a wider range of players, putting them more in direct competition with Cobra than complementing them" (GOLFDIGEST.com, 3/10).

DEAL'S RAMIFICATIONS: GOLFWEEK's Gene Yasuda noted Puma "has been making steady investments into its golf business, and this year, made a greater commitment to the North American market." Puma also "caused a buzz in the industry when it signed heralded PGA Tour rookie Rickie Fowler to an apparel deal." Meanwhile, the proposed deal "enables Acushnet to focus on its leading brands, Titleist and FootJoy" (GOLFWEEK.com, 3/10). Acushnet Chair & CEO Wally Uihlein: "We're under attack on the Titleist side, both in balls and clubs. There was a feeling we could go out and hire a separate sales force for Cobra, but that becomes a fixed cost." Acushnet Dir of Communications Joe Gomes added that the company's "entire 40-person Cobra staff" is "expected to move over to Puma" when the deal is complete (SAN DIEGO UNION-TRIBUNE, 3/11).

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