Private equity firm Centroid Investment PE designated global fund Entrada as the preferred negotiator for the sale of golf brand TaylorMade, with the acquisition price reported below 4 trillion won. Entrada must submit a letter of commitment (LOC) by August to maintain its preferred negotiator status. The designation follows the previous preferred bidder Old Tom Capital's failure to submit an LOC within the required timeframe earlier this year. Fashion company F&F, which invested approximately 550 billion won in TaylorMade's 2021 acquisition, holds a right of first refusal that allows it to match any final offer.
Entrada Partners with Dave Checketts for TaylorMade Bid
Entrada formed a consortium with American sports executive Dave Checketts for the TaylorMade acquisition. Checketts founded Major League Soccer's Real Salt Lake and served as the club's first owner. He launched a $1.2 billion joint fund called Cynosure-Checketts Sports Capital with The Cynosure Group in the previous year, focusing on global sports assets. The fund's investments include ALK Capital, which owns English Premier League club Burnley FC and Spanish La Liga club Espanyol.
Entrada previously participated in TaylorMade's bidding process at the end of last year as a secondary candidate. The fund's bid at that time was approximately $2.4 billion (about 3.5 trillion won), lower than Old Tom Capital's bid of approximately $3.2 billion (about 4.7 trillion won). JP Morgan and Jefferies serve as the M&A advisors for the sale.
Old Tom Capital Lost Preferred Status After Missing LOC Deadline
Centroid PE designated Old Tom Capital as the preferred negotiator and held discussions, but Old Tom Capital failed to submit an LOC within the deadline. Centroid PE revoked Old Tom Capital's preferred negotiator status earlier this year. Entrada entered the newly organized negotiation table and submitted a bid at a similar level to its previous offer.
Centroid PE acquired 100% of TaylorMade's shares for approximately 2 trillion won in 2021. F&F provided approximately 550 billion won as a major limited partner in that transaction and secured a right of first refusal. This right allows F&F to acquire shares under the same terms as the preferred negotiator when TaylorMade is sold.
F&F Secured Multiple Letters of Commitment from Securities Firms
F&F secured LOCs from multiple securities firms. Market observers commonly expect that F&F can raise acquisition financing based on Entrada's proposed amount, unlike Old Tom Capital's higher bid. The selling side stated that Entrada has not been officially selected as the preferred negotiator and that discussions continue with multiple potential buyers. Centroid PE proposed TaylorMade's acquisition to MBK Partners earlier this year and explored transaction possibilities with various candidates.
F&F operates global fashion brands including licensed brands MLB and Discovery Expedition, and proprietary brands such as Duvetica. The company recorded consolidated revenue of 1.934 trillion won and operating profit of 468.5 billion won in the previous year.
FAQ
What did Centroid Investment PE do regarding TaylorMade's sale?
Centroid Investment PE designated Entrada as the preferred negotiator for TaylorMade's sale, with the acquisition price reported below 4 trillion won. Entrada must submit a letter of commitment by August to maintain this status.
Why did Old Tom Capital lose its preferred negotiator status?
Old Tom Capital failed to submit a letter of commitment within the required deadline earlier this year, leading Centroid PE to revoke its preferred negotiator status and open negotiations to other bidders.
What right does F&F hold in the TaylorMade sale?
F&F holds a right of first refusal from its 550 billion won investment in TaylorMade's 2021 acquisition, allowing it to match any final offer and acquire shares under the same terms as the preferred negotiator.
