Last Updated on Tuesday, 27 March 2012 21:15
Tuesday, 27 March 2012 20:15
PLANO, TEXAS - TaylorMade-adidas Golf parent company, the adidas Group has reached a deal to buy Adams Golf Inc. for about $70 million.
The German company's TaylorMade-adidas Golf business will acquire Plano, Texas-based Adams Golf for $10.80 per share.
That represents a 9.5 percent premium over the company's Friday closing stock price of $9.86.
The news sent shares of Adams Golf up 87 cents, or 8.8 percent, to $10.73 in morning trading.
The deal comes a couple of months after Adams, which is publicly traded, announced it was seeking strategic operating alternatives. Adams chief executive, Chip Brewer, recently left the company to take the top job at rival Callaway.
Adidas said the addition of Adams Golf will allow TaylorMade-adidas to broaden its product range and expand its presence to a wider range of golfers.
Adams' products focus on game-improvement, along with senior and women golfers, while TaylorMade-adidas' focuses on younger and more advanced golfers, Adidas said.
Adams will remain headquartered in Plano, Texas.
"We are very excited to team up with Adams Golf, whose management team we have respected for many years," said Mark King, president and CEO of TaylorMade-adidas Golf in a company press release.
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"Our mission is to be the best golf company in the world across all geographies, products and customer demographics, and adding Adams Golf is another important step in achieving that goal."
Adams Golf founder Barney Adams - who took over from former Adams Golf CEO Brewer on an interim basis last month - had this to say about his company's next business chapter.
"This merger provides strong opportunities for our employees, suppliers and partners," he said. "The Adams Golf brand will fit nicely into TaylorMade-adidas Golf's stable of brands, and together we will be able to increase our reach and better serve our customers by leveraging a wider set of resources."
The deal, which remains subject to approval by Adams shareholders, has been approved by that company's board. In addition, stakeholders representing about 35 percent of the company's outstanding shares and have agreed to vote in favor of it.
Adidas said it plans to finance the deal with cash on hand or through existing credit lines. The deal, which is also subject to customary closing conditions and regulatory approvals, is expected to close mid-2012.
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