Centroid's acquisition of TaylorMade hits snag

Centroid's acquisition of TaylorMade hits snag

TaylorMade’s logo

Local PEF might delay payments for TaylorMade acquisition

By Anna J. Park

Local private equity firm (PEF) Centroid Investment Partners’ acquisition of global golf brand TaylorMade has hit an unexpected snag, as Centroid faces the possibility of delayed payments for the acquisition process.

According to the investment banking (IB) industry, Centroid’s M&A fund formation has been delayed, as a few institutional investors have backed out of their initial investment plans, which were originally to join a mezzanine fund, a hybrid of debt and equity financing.

Out of the PEF’s plan to raise 2.1 trillion won ($1.84 billion) for the acquisition financing, the plan is said to be still short around 300 billion won. Given that Centroid signed a deal a few months ago to purchase all 100 percent of TaylorMade’s stakes at 1.8 trillion won, the reason why they plan to raise the 300 billion won more than the required money is to secure interest payments as well as other necessary underwriting charges surrounding the acquisition.

As Centroid is set to pay the money for the deal by the third week of July, it could be facing an unwanted delay of the payments. Facing such obstacles, Centroid is attempting to raise the additional money by attracting other LPs (limited partners) for the investment.

One of the reasons that some of the institutional investors backed out of the deal ― changing their positions in the investment deal ― is their lack of trust in The Nature Holdings, which is a strategic investor (SI) of Centroid in this acquisition deal.

Centroid's acquisition of TaylorMade hits snag

TaylorMade golf products / Courtesy of TaylorMade

Centroid selected The Nature Holdings last month as a partner in the acquisition of TaylorMade, given the company’s knowhow in the retail licensed clothing business. The clothing company has been known for its National Geographic licensed fashion brand, which is popular among the young people.

As Centroid is targeting the MZ generation for expanding the global gold brand’s fashion business, the two companies seem to be able to create synergy. TaylorMade’s golf clothing business only accounted for around 2 percent of its entire revenue, which is far lower than other global golf brands like Titleist and Callaway, where their clothing business takes up more than 20 percent of their revenue.

However, some institutional investors thought that the middle-sized clothing company’s capital level and management results were not enough in terms of credentials to earn their trust to put their money into it.

Also Centroid’s promise of high interest rates ― higher than the market’s rates ― for its mezzanine fund investors also played a part in weakening investors’ trust in the PEF, as the plan seemed somewhat unrealistic. Centroid suggested a 10.5-percent interest rate for the mezzanine fund, which is pretty rare in the market.

If the capital raise is completed as planned by Centroid, the PEF plans to list the golf brand on the U.S. stock market by around 2023.

News Related


Earnings Beat In The Cards For NY Times' Stock?

The New York Times logo is seen on a newspaper rack at a convenience store in Washington, DC, on … [+] August 6, 2019. (Photo by Alastair Pike / AFP) ... Read more »

Forecast Of The Day: Salesforce.com's Cloud-Based CRM Revenue

Sign with logo at the regional office of Salesforce in the Silicon Valley, Palo Alto, California, … [+] November 2, 2018. (Photo by Smith Collection/Gado/Getty Images) Getty Images What? Trefis ... Read more »

Dogecoin Cofounder Blasts Crypto And Claims 'Billionaires Manipulating Markets'—Here's Why He Quit The Joke Memecoin Years Ago

Topline Though he’s kept quiet for much of dogecoin’s meteoric rise over the past year, the coin’s cofounder Jackson Palmer broke his silence to rail against cryptocurrencies in a wild ... Read more »

New Bridges, Roads, Internet And More: Here's What Made It Into The $1 Trillion Infrastructure Bill Backed By The Senate

Topline Following weeks of bipartisan negotiations, the Senate late Sunday released a 2,702-page infrastructure bill that, if approved, would authorize nearly $1 trillion for the nation’s roads, highways, bridges, transit ... Read more »

Billionaires Gautam Adani, Kuok Khoon Hong's Indian JV To Raise $605 Million From IPO

Gautam Adani addresses the media in Mumbai to unveil the company’s new global corporate brand … [+] identity and logo on February 23, 2012 in Mumbai, India. Abhijit Bhatlekar/Mint via ... Read more »

Strong Opening Move: New Month To Feature Jobs Report, Slew Of Earnings

Getty Images Getty Images Key Takeaways: Another busy earnings week ahead with Uber UBER , Lyft, Square SQ Jobs report this coming Friday dominates the data picture Square planning to ... Read more »

Uber And Lyft Race To Raise Hood On Driver Shortages, Alternative Revenue Sources

Getty Images Getty Images Key Takeaway: Driver shortages, customer hesitancy seem to be impeding the path to profitability Regulation on driver benefits could be another roadblock Investors eyeing ride-hailers’ moves ... Read more »

Pressure Descends On Market Despite Impressive Outing From Morgan Stanley

Getty Images Getty Images Key Takeaways: Morgan Stanley becomes latest big bank to impress with earnings, but stock falls China’s GDP comes in below expectations, but retail sales, industrial production ... Read more »

Big Bank Earnings: JP Morgan, Wells Fargo, Goldman Could Give Big Picture Economic View

Getty Images Getty Images Key Takeaways: Big bank earnings seen rising triple-digits year-over-year as economy recovered Tougher times could be ahead for industry as rates continue falling Weak trading activity ... Read more »

Why Did Roku Stock Drop 10% In A Week?

UKRAINE – 2021/07/04: In this photo illustration a Roku logo is seen on a screen with a silhouette … [+] of a hand holding a tv remote. (Photo Illustration by ... Read more »

What To Expect From Electronic Arts' FY22 Q1?

UKRAINE – 2021/04/23: In this photo illustration, Electronic Arts (EA) logo of a US video game … [+] company is seen on a smartphone and a pc screen. (Photo Illustration ... Read more »

Up 5% Last Week, Diodes Incorporated Stock Could Continue Its Rise

BRAZIL – 2020/10/29: In this photo illustration the Diodes Incorporated logo seen displayed on a … [+] smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via ... Read more »

Under Armour Stock To Trade Higher Post Q2 Release?

UKRAINE – 2021/05/05: In this Photo illustration an Under Armour logo of a sports equipment company … [+] is seen on a smartphone and a pc screen. (Photo Illustration by ... Read more »

Pandemic Blues Weighing On MGM Resorts Stock

LAS VEGAS, NEVADA – AUGUST 28: An exterior view shows the marquee at MGM Grand Hotel & Casino on … [+] the Las Vegas Strip amid the spread of coronavirus ... Read more »

Lululemon's Stock Gained 10%, Room For More?

HONG KONG, CHINA – 2021/04/18: A shopper walks past the Canadian sportswear clothing band, Lululemon … [+] logo and store in Hong Kong. (Photo by Budrul Chukrut/SOPA Images/LightRocket via Getty ... Read more »

H&R Block's Cash Flow Increases The Safety Of Its Dividend Yield

Donation money jar filled with coins in front of holiday lights getty Recap from June’s Picks On a price return basis, the Safest Dividend Yields Model Portfolio (-1.7%) underperformed the ... Read more »

Honda Motor's Stock Trading Higher Before Q1 Earnings

BRAZIL – 2020/09/05: In this photo illustration the Honda Motor Company logo seen displayed on a … [+] smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket ... Read more »

7% Gains Left For Walmart's Stock?

Walmart logo is displayed on a mobile phone screen photographed on surgical masks background for … [+] illustration photo during the coronavirus pandemic. Gliwice, Poland on April 21, 2021. (Photo ... Read more »

#MeToo Topples Activision Blizzard Exec After Huge Staff Revolt—$10 Billion In Market Value Lost

Topline The plight of Activision Blizzard, the nation’s largest video game company, intensified Tuesday morning with the resignation of executive J. Allen Brack, the president of subsidiary Blizzard Entertainment who ... Read more »

This Stock Has A 8.89% Yield And Sells For Less Than Book

Prospect Capital has been named as a Top 10 dividend-paying financial stock, according to Dividend Channel, which published its most recent ”DividendRank” report. The report noted that among shares of ... Read more »

Cinemark Holdings Inc Ranked Among Today's Top Shorts

Close Up Image Of A Stock Market Graph getty Earnings, jobs, and the Delta variant remained on the minds of anxious investors as the Dow and S&P 500 remained within ... Read more »

Down 40% This Year, Is Luminar Stock A Buy?

BRAZIL – 2021/04/04: In this photo illustration a Luminar logo seen displayed on a smartphone. … [+] (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty ... Read more »

Telephone & Data Systems Inc Ranked Among Today's Top Buys

Businessman checking stock market on digital tablet and a desktop computer Getty Investors remained on edge after the indices experienced a late-day sell-off to kick off the month of August. ... Read more »

What's New With Moderna Stock?

UKRAINE – 2020/11/16: In this photo illustration, A medical syringe seen in front of Moderna U.S. … [+] biotechnology company logo displayed on a screen. Moderna said its experimental vaccine ... Read more »

Netflix Ranked Among Today's Trending Stocks

Someone analyzing investment data on laptop getty July saw the S&P 500 hit its sixth straight month of gains at 2.3%, marking the longest month-over-month winning streak since 2018. While ... Read more »

Novavax Stock: Buy The Dip?

UKRAINE – 2020/11/24: In this photo illustration a medical syringe and a vial depicting fake … [+] coronavirus vaccine seen in front of Novavax US vaccine development company logo. (Photo ... Read more »

Where Are Bitcoin Prices Headed After Their Latest Pullback?

Technical analysts weighed in after bitcoin’s latest price movements. (Photo illustration by … [+] Chesnot/Getty Images) Getty Images Bitcoin prices have been trading primarily between $30,000 and $42,000 since late ... Read more »

Investors Eyeing Bonds For Economic Growth-Rate, Delta And Inflation Concerns

Getty Images Getty Images Key Takeaways: Markets look to bounce back as equity futures higher Crude oil looking for a bounce after falling below $70 Lyft LYFT and Akamai to ... Read more »

Deal Of The Century: How Michael Dell Turned His Declining PC Business Into A $40 Billion Windfall

After years battling Silicon Valley skeptics and Wall Street adversaries, Michael Dell has pulled off the deal of the century, borrowing and flipping his way to a $50 billion fortune. ... Read more »

Vista Equity Partners Set To Make Over $50 Million On Thoma Bravo's $6.6 Billion Stamps.com Buyout

Thoma Bravo is buying shipping software company Stamps.com for $6.6 billion. (AP Photo/Mark … [+] Lennihan) ASSOCIATED PRESS Two of the fiercest competitors in the private equity world are poised ... Read more »

Stocks To Consider As The $1 Trillion Infrastructure Bill Advances

KIEV, UKRAINE – 2018/11/13: In this photo illustration, the Applied Materials, Inc. logo seen … [+] displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) LightRocket ... Read more »

Limited Upside In Hyatt Stock?

SAN FRANCISCO, UNITED STATES – 2020/01/23: A view of the Grand Hyatt hotel logo seen at one of their … [+] hotels. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images) ... Read more »

Up 8% Last Week, Will Albemarle Stock Continue To Rally?

Logo www.albermale.com Albemarle stock (NYSE: ALB), a chemicals company that is also one of the largest producers of lithium – a key raw material for electric vehicle batteries – has ... Read more »

Tencent's Pony Ma Loses $3 Billion After State Media Calls Online Games ‘Spiritual Opium'

Pony Ma Huateng attends China (Shenzhen) IT Summit at Wuzhou Guest House on March 25, 2018 in … [+] Shenzhen, China. Visual China Group via Getty Images Chinese internet tycoon ... Read more »

Buy Las Vegas Sands Stock For Long-Term Gains

UKRAINE – 2021/06/27: In this photo illustration, a Las Vegas Sands Corporation logo seen displayed … [+] on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) SOPA ... Read more »

China's Clampdown On Tech Firms And The Risk It Poses For Investors

Gold coin with the symbol of the Chinese yuan is clamped in the clamp. Financial concept. Isolated. … [+] 3D Illustration getty One of the hallmarks of China’s economic miracle ... Read more »

How Badly Will The Chip Shortage Impact Apple?

Close-up of blue logo on sign with facade of headquarters buildings in background near the … [+] headquarters of Apple Computers in the Silicon Valley, Cupertino, California, August 26, 2018. ... Read more »

Despite A 10% Rise Last Week Align Technologies Is Likely To See Higher Levels

Logo https://talentoptimization.org/talent-verse/align The stock price of Align Technologies stock (NASDAQ: ALGN), best known for its Invisalign dental solutions, has seen a 14% rise over the last twenty-one trading days, while ... Read more »

Will Centene Stock Rebound After An 8% Drop Last Week?

UKRAINE – 2021/04/14: In this photo illustration the Centene Corporation logo of an insurance … [+] company is seen on a smartphone and a pc screen. (Photo Illustration by Pavlo ... Read more »

Prudential Financial Stock To Top The Estimates In Q2?

UKRAINE – 2021/02/14: In this photo illustration the stock market graphics of Prudential Financial … [+] seen displayed on a smartphone with a Prudential Financial logo in the background. (Photo ... Read more »