South Korean clothing company F&F, founded and led by billionaire Kim Chang-soo, is joining in a $1.8 billion acquisition of U.S. golf equipment brand TaylorMade as golf’s popularity grew amid pandemic-related social distancing restrictions.
F&F is joining Seoul-based Centroid Investment Partners’ bid to acquire TaylorMade from New York-based KPS Capital Partners, which bought the market-leading golf-club maker from Adidas for $425 million in 2017.
F&F, which is best known for its fashion brands MLB and Discovery Expedition, will contribute 500 billion won (about $430 million) to the deal, according to a Monday filing with Korea’s Financial Supervisory Service. The deal is expected to close on Friday.
Golf on the rise
Golf has recently gained popularity for allowing players to stay active while keeping social distancing. After a 20% decrease in rounds played in the U.S. in March and April last year over the same months of 2019, rounds rose 14% in June last year versus June 2019, Golf.com reports.
“Along with more solitary and naturally social-distanced sports such as running and cycling, golf has seen a boost during the Covid-19 pandemic,” says Mark Thomas, managing director of U.K.-based, China event-focused S2M Consulting firm. Thomas cites participation jumps in parts of Europe and the United States where regulations allow play and a “particular” increase in developing markets such as China.
But while play grows, he says, golf-related events have been “devastated” and “only recently we have seen events with spectators restart.”
“Also, with many major economies suffering from slowdown and recession, it may not bode well for continued growth in the medium term as other social outlets re-open, whereas golf’s status as a luxury sport may count against it as purse strings are tightened,” Thomas notes.
TaylorMade is the latest deal by F&F after it created a separate entity, F&F Holdings, last month that focuses on investing in other companies. F&F’s Kim, who made his debut on the Korea Rich List last year, has an estimated net worth of $2.5 billion on the Real-Time Billionaires List.