Adidas AG ended a yearlong bid to sell its golf equipment units on Wednesday, inking a $425 million deal with private equity shop KPS Capital Partners to offload its TaylorMade, Adams Golf and Ashworth Golf units.
Adidas says it believes TaylorMade is in a strong position, but it wants to focus on its shoe and apparel products.
The sports footwear and apparel maker is selling its golf brands to focus on its core brands.
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The New York-based KPS manages $5.7 billion in investments in several companies.
The sale underlines the waning popularity of golf, which has waned in the U.S. since the early 2000s when Tiger Woods dominated the sport. A declining golf market weighed on Adidas's performance for years, though sales have started to turn the corner, enabling the company to find a buyer.
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According the ESPN's Darren Rovell, Adidas' golf equipment business has been trending downwards over the last few years.
TaylorMade signed world number two Rory McIlroy this week to add to their current Tour staff which includes the likes of world number one Dustin Johnson, number three Jason Day, Masters champion Sergio Garcia, Olympic gold medallist Justin Rose and 14-time major victor Tiger Woods. Around half of the price of the unit will be paid in cash with the remainder in a combination of secured notes and contingent considerations. Adidas' revenue in the industry was $1.7 billion in 2012 but down to about $500 million four years later.
Adidas has been shopping its golf segment, which includes leading golf brand TaylorMade, along with Adams Golf and apparel company Ashworth, since early 2016.
In the first quarter, Adidas reported TaylorMade sales of $319 million, up 4 percent from the same quarter previous year.
Sources contacted at TaylorMade and KPS Capital Partners did not return requests for comment. But yesterday's sale follows years of falling sales in the golf division.
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