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Home Titleist and FootJoy sold for $1.23 billion

Fortune Brands, Inc. (NYSE:FO) has found a buyer for its Acushnet Company golf business, featuring the iconic Titleist and FootJoy brands. A group led by Fila Korea Ltd., the owner of the Fila brand globally, and Mirae Asset Private Equity, the largest private equity firm in Korea has agreed to pay $1.225 billion. It is an all cash deal, which is subject to certain closing conditions, including regulatory approvals. The transaction is expected to close this summer.

After the acquisition is completed, Acushnet will remain as a standalone company through separate operation from Fila Korea, with its worldwide p4headquarters remaining in Fairhaven, Mass., and led by Wally Uihlein and Acushnet’s current management team. “The Acushnet Company has long been the trusted steward of two of golf’s most revered and iconic brands and has perpetuated the longest running records of golf equipment success in the game,” stated Wally Uihlein, chairman and chief executive officer, Acushnet Company.  “The Fila Korea and Mirae group understands and appreciates our golf industry leadership, passionate associates, and unique and enduring culture.  Together, with our new owners, our team is looking forward to strengthening and building upon the global success of the Titleist and FootJoy brands.”

Established in Italy in 1911, Fila is considered a leading sport and leisure footwear and apparel brand that is distributed worldwide.  The group led by Fila Korea and Mirae, also includes the National Pension Service of Korea, the nation’s largest state-owned pension fund, and Korea Development Bank, Korea’s largest government-owned bank.
p5“The acquisition of Acushnet transforms our platform with a stable of premier world class brands,” said Gene Yoon, chairman and chief executive officer, Fila Korea, Ltd.  “We are equally excited to embrace Acushnet’s exceptional management team led by Wally Uihlein.  With our extensive knowledge and reach in Asia, we believe that the Acushnet brands have incredible new opportunity for growth in the emerging markets in Asia.”

Fortune Brands estimates it will realize net proceeds of approximately $1.1 billion after taxes and expenses. “This transaction is a very important milestone as we execute our proposed plan to separate our three strong businesses for the purpose of maximizing long-term value for our shareholders,” said Bruce Carbonari, chairman and chief executive officer of Fortune Brands.  “Not surprisingly, the sale process for Acushnet generated broad interest from a range of prospective buyers and resulted in this agreement that p6reflects the superior performance and prospects of the business. The proceeds from this sale will strengthen Fortune Brands’ balance sheet and support strong capital structures for both Beam and Fortune Brands Home & Security as they look to the prospect of competing as independent companies later this year.”

Acushnet is the leading and most profitable golf equipment company in the world. Net sales exceeded $1.2 billion in 2010, with nearly half of revenues generated in markets outside the United States. Operating income before charges was $80 million in 2010, and operating income on a GAAP basis was $89 million.  "Titleist and FootJoy are powerful global golf brands,” said Uihlein.  “The fact that Asia Pacific represents over 30% of the world's total golf equipment spending, and that South Korean golfers are among the most passionate and organized in the game, is testament to the significant investment in the Acushnet Company by the Fila and Mirae group. They recognize the strength of the brands and opportunities for growth particularly in golf's emerging regions.” JH Ryu, the CEO of Mirae Asset Private Equity, stated, “We are very impressed with what Acushnet management and employees have accomplished so far.  We will fully support the company to remain focused on its core golf expertise and continue driving the growth of the industry.”

The sale has been approved by the Fortune Brands Board of Directors as well as the Boards of Fila Korea and Mirae, and is subject to certain closing conditions, including regulatory approvals. For more on this story be sure to read the May 23, 2011 issue of the Web Street Golf Report.