Adidas AG has agreed to sell golf brands TaylorMade, Adams Golf and Ashworth to private-equity firm KPS Capital Partners for $425 million, after a year on the market.
The German-based sportswear maker on Wednesday said it expects to complete the transaction with KPS by the end of the year.
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TaylorMade and the accompanying subsidiary golf brands have been for sale since May 2016, part of Adidas's efforts to shed operations that aren't central to its footwear and sporting-apparel businesses.
The golf equipment industry has been challenged, particularly as U.S. sporting goods companies have gone through several retail bankruptcies and liquidations. Adidas competitor Nike Inc. last summer said that it too would exit the golf equipment industry, focusing instead on apparel and footwear.
KPS Capital, which manages about $5.3 billion in funds, typically seeks stakes in manufacturers and industrial firms. In March, it bought WHA Holding SAS, a steel abrasives maker known as Winoa, for undisclosed terms.
Adidas's sale of its golf brands to a newly formed unit of KPS is expected to be a mix of cash, secured note and continued considerations, according to Adidas.
In a statement, KPS managing partner David Shapiro said the firm is looking forward to working with TaylorMade "by driving growth both organically and through strategic acquisitions."
Adidas said it "will record a nonoperational negative P&L impact in the high double-digit to low triple-digit million euro range, which will be reported in discontinued operations" in its 2017 results.
The transaction is the first significant one for new Adidas Chief Executive Kasper Rorsted, who took the helm last fall from consumer products giant Henkel AG. In recent years, the sportswear firm has spun off its Rockport casual shoe business and Mitchell & Ness lifestyle line.
Adidas shares closed down 1.8% to EUR180.60 in Germany.
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(END) Dow Jones Newswires
May 10, 2017 16:05 ET (20:05 GMT)