Private equity firm Entrada has been designated as the preferred negotiator for the acquisition of global golf brand TaylorMade by seller Centroid Investment, according to investment banking sources. Entrada formed a consortium with U.S. sports investor Dave Checketts for the bid, with the acquisition price estimated at 3 trillion to 4 trillion won. The consortium must submit a letter of commitment by August to maintain preferred negotiator status. Centroid PE acquired 100% of TaylorMade in 2021 for approximately 2 trillion won, with Korean fashion company F&F contributing 550 billion won as a major limited partner and securing a right of first refusal in the transaction.
Entrada Forms Consortium with Sports Investor Dave Checketts
Entrada partnered with Dave Checketts to structure the TaylorMade acquisition consortium. Dave Checketts is the founder and former owner of Major League Soccer's Real Salt Lake and a prominent U.S. sports executive and investor. Last year, Checketts launched a $1.2 billion joint fund called Sinosure-Checketts Sports Capital with New York and Salt Lake City-based Sinosure Group. The fund has invested in global sports assets including ALK Capital, which owns English Premier League club Burnley FC and Spanish La Liga club Espanyol.
Entrada has been conducting due diligence on TaylorMade and must submit a letter of commitment by August to retain preferred negotiator status. JP Morgan and Jefferies are serving as advisors on the TaylorMade sale.
Previous Bidder OldTom Capital Lost Preferred Status
Entrada was previously identified as a second-tier acquisition candidate when TaylorMade's sale process began late last year. At that time, Entrada's bid was approximately $2.4 billion (approximately 3.5 trillion won), below competitor OldTom Capital's bid of approximately $3.2 billion (approximately 4.7 trillion won).
Centroid PE had designated OldTom Capital as preferred negotiator and continued discussions, but OldTom Capital failed to submit a letter of commitment within the deadline and lost that status earlier this year. Entrada subsequently entered the new negotiation process for the TaylorMade acquisition.
F&F Holds Right of First Refusal from 2021 Investment
F&F, a major limited partner in Centroid PE's TaylorMade acquisition, holds a right of first refusal that allows the company to acquire TaylorMade shares under the same terms as the preferred negotiator. F&F is a global fashion company operating license brands including MLB and Discovery Expedition, as well as proprietary brands like Duvetica. The company recorded consolidated revenue of 1.934 trillion won and operating profit of 468.5 billion won last year.
F&F is expected to decide whether to exercise its right of first refusal based on the final sale price. Market observers note that unlike OldTom Capital's previous bid price, Entrada's proposed amount may be within F&F's capacity to raise through acquisition financing. F&F has secured letters of commitment from multiple securities firms.
The seller maintains that Entrada has not been formally selected as preferred negotiator and that discussions continue with multiple potential buyers. Centroid PE has explored transaction possibilities with various candidates, including proposing a TaylorMade acquisition to MBK Partners earlier this year.
FAQ
Q: What is the estimated acquisition price for TaylorMade?
A: The acquisition price is estimated at 3 trillion to 4 trillion won according to investment banking sources.
Q: What deadline does Entrada face in the TaylorMade acquisition process?
A: Entrada must submit a letter of commitment by August to maintain preferred negotiator status.
Q: What right does F&F hold in the TaylorMade sale?
A: F&F holds a right of first refusal secured from its 550 billion won investment in Centroid PE's 2021 acquisition of TaylorMade, allowing F&F to acquire shares under the same terms as the preferred negotiator.
