Discovery owner F&F joins Centroid in TaylorMade Golf buyout

2021.07.20 10:48:54 | 2021.07.20 15:49:28

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South Korea’s mid-sized fashion company F&F Co. known for sportswear brand MLB and outdoor brand Discovery will join Centroid Investment Partners in a buyout of TaylorMade Golf Co., a California-based golf equipment sponsor of Tiger Woods, with investment of 400 billion won ($347 million).

According to multiple sources from the investment bank industry on Monday, F&F confirmed that it has decided to team up with Centroid private equity to buy TaylorMade Golf. As a strategic investor, the Korean fashion company will invest 300 billion won in equity and remaining 100 billion won in mezzanines for a 49 percent stake in a project fund that will be created for the TaylorMade acquisition. F&F plans to disclose details later Tuesday.

Shares of F&F jumped 7.05 percent to close at 577,000 won on Tuesday.

The buyer is also considering inviting other private equity funds to invest in mezzanines after deal closing, said an unnamed official from the investment bank industry.

Talks between F&F and Centroid picked up speed over the weekend when F&F Chairman Kim Chang-soo and Centroid CEO Jeong Jin-hyeok personally met for negotiations. F&F was eager to take part in the acquisition while Centroid was in need of funds.

The Nature Holdings, a local importer of popular apparel brands National Geographic and Jeep that was considered a strong strategic investor candidate, has decided not to join the buyout.

Kospi-listed F&F boasts a market capitalization of 4.1 trillion won as of Monday, about eight times larger than The Nature Holdings at 551.2 billion won.

F&F – founded in 1992 – is known for popular brands Discovery, MLB, and MLB Kids. It also owns cosmetics brand Banila Co. Its chairman and founder Kim raised the company by selling apparels of overseas brands including Benetton and Renoma Sports at home.

Last year, F&F raised 122.5 billion won in operating income on sales of 837.6 billion won on a consolidated basis. The company announced an equity spinoff decision in November last year and is currently divided between fashion business 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 trillion won. Of the total, it plans to secure 1 trillion won via bank and brokerage loans, 450 billion won via mezzanine investment, and remaining 610 billion won via equity investment.

MG Community Credit Cooperatives will take part as core investor and look over 350 billion won worth equity and mezzanines.

Centroid private equity will be able to complete its acquisition of TaylorMade Golf early through its partnership with F&F, said an unnamed industry official, possibly next month.

By Kang Doo-soon, Kang Woo-seok, and Lee Eun-joo

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