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Thursday, November 1, 2007
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Srixon to acquire Cleveland BR>By www.GolfWeek.com And the winner of the Cleveland Golf sweepstakes is – Srixon. Cleveland's parent company, Quiksilver, has reached an agreement to sell the Huntington Beach, Calif.-based golf equipment maker to Sumitomo Rubber Industries, a leading Japanese manufacturer of tires and Srixon's parent company. The deal, which is valued at $132.5 million, is expected to be close during the fiscal quarter ending Jan. 31. It also ends a bidding war that drew interest from numerous equipment makers and even a few companies looking to break into the hardgoods business by taking Cleveland off Quiksilver's hands. Though it was never officially announced that Cleveland was for sale, rumors had been rampant since early summer that the company was on the block. That's when Quiksilver, whose core business is surfing apparel, reported its first quarterly loss in 15 years. The setback mostly was attributed to its struggling hardgoods business that included Cleveland, which it acquired in 2005 as part of a deal to buy ski-maker Rossignol. Such issues prompted Quiksilver CEO Robert McKnight Jr. to open the door to sale overtures. During a June conference call, he said management was "looking at every possible alternative concerning the hardgoods" and "everything is on the table." Since then, however, Quiksilver and Cleveland executives publicly remained quiet. But numerous acquisition scenarios surfaced as potential suitors lined up to make their bids. Early in the process, industry executives and analysts told Golfweek that TaylorMade-Adidas Golf was the front-runner and seemed poised to make the acquisition until being outbid by Srixon in the 11th hour. Others in the hunt reportedly included Bridgestone, and Puma, which was said to be looking to raise its profile in golf by getting into the hardgoods business. Many industry executives initially questioned Srixon's chances, doubting whether its Japanese parent would be willing to outbid rivals. The company has less than 100 employees working at its U.S. headquarters in Lawrenceville, Ga., a unit that has been selling golf balls and equipment in the U.S. for 10 years. Sumitomo, however, has more than 5,000 employees worldwide and has been making golf products for 70 years. It owns the Dunlop/Maxfli brand in Japan, Korea and Taiwan, and has more than 550 golf ball patents, making Srixon one of the world's largest producers of golf balls. |
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