Adidas AG (FRA:ADS) signed a deal to sell its golf business including TaylorMade, Adams Golf and Ashworth to KPS Capital Partners.
The sports footwear and apparel maker is selling its golf brands to focus on its core brands. “Within our long-term strategy ‘Creating the New’, our focus is clearly on our core competencies in footwear and apparel and on our two major brands Adidas and Reebok,” Adidas CEO Kasper Rorsted said in a statement.
Under the terms of the agreement, a newly-formed affiliate of KPS Capital Partners will acquire Adidas’ golf business for $425 million. The purchase amount will be paid half in cash and half with a combination of secured note and contingent considerations.
The deal is expected to be completed later in 2017, subject to customary closing conditions. Guggenheim Securities acted as exclusive financial advisor to Adidas, while Sheppard Mullin Richter & Hampton served as legal counsel.
Adidas Q1 Results
Adidas AG (FRA:ADS) reported strong financial results for the first quarter of 2017, with currency-neutral revenues increasing 16%. Sales were up 19% to $6.2 billion.
The world’s second largest sport apparel company’s income from continuing operations rose 30% to $497 million. Earnings per share from continuing and discontinued operations increased 29% to $2.46.
For 2017, the company expects sales to increase between 11% and 13% on a currency-neutral basis driven by double-digit growth in Western Europe, North America and Greater China. It is looking to achieve net sales of €25 billion to €27 billion and an implied operating margin of 11% by 2020.