Ashworth (NASDAQ:ASHW)
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Ashworth, Inc. (NASDAQ:ASHW) and the adidas Group announced today that
the TaylorMade-adidas Golf business segment has entered into a
definitive agreement to acquire all of the outstanding shares of
Ashworth, Inc. for $1.90 per share in cash. The transaction value is
$72.8 million (€54.1 million), which includes
the assumption of $46.3 million (€34.4
million) of Ashworth debt based on Ashworth, Inc.'s 10-Q for the period
ended July 31, 2008.1 The transaction will be
effected through a tender offer to be launched shortly by a subsidiary
of Taylor Made Golf Company, Inc. (“TaylorMade-adidas
Golf”) for all outstanding Ashworth shares.
The tender offer will be subject to, among other things, the condition
that at least a majority of the outstanding Ashworth shares are tendered.
Through the acquisition of Ashworth, TaylorMade-adidas Golf becomes the
leading and most balanced golf apparel company with a complete apparel
offering for golfers globally. The transaction enables TaylorMade-adidas
Golf to widen its product range, to further strengthen its distribution
platform and to extend its marketing presence.
“Ashworth is a well-established, authentic
golf apparel brand with a strong heritage and represents an excellent
addition to TaylorMade and adidas Golf,” said
adidas AG Chairman and CEO Herbert Hainer. “This
acquisition underscores our commitment to continued growth in the golf
category.”
“We are excited to bring Ashworth alongside
our industry-leading TaylorMade and adidas Golf brands.
TaylorMade-adidas Golf’s mission is to be the
best performance golf company in the world and adding Ashworth is
another important step in achieving that goal,”
commented Mark King, President and CEO of TaylorMade-adidas Golf.
"This deal provides exciting prospects for our colleagues, partners and
customers around the world. The Ashworth®
brand fits perfectly into TaylorMade-adidas Golf’s
line-up of brands and together we will be able to increase efficiency
and drive the golf apparel business going forward, leveraging a broad
set of resources,” said Allan Fletcher, CEO
of Ashworth, Inc.
The Board of Directors of Ashworth has approved the transaction. In
addition, members of the Knightspoint Partners group who collectively
own over 16% of Ashworth’s outstanding shares
have entered into an agreement whereby they have agreed to tender their
shares. The Knightspoint Partners group represents the largest reporting
shareholder group of Ashworth.
The adidas Group plans to finance the acquisition with cash on hand or
through existing credit lines. The transaction is subject to customary
closing conditions and is expected to close in the fourth quarter 2008.
In connection with the transaction, Barclays Capital is acting as
financial advisor to the adidas Group. Kurt Salmon Associates Capital
Advisors, Inc. is acting as financial advisor to Ashworth.
About Ashworth, Inc.
Ashworth, Inc. (NASDAQ:ASHW) is a leading designer of men’s
and women’s golf-inspired lifestyle
sportswear distributed domestically and internationally in golf pro
shops, resorts, upscale department and specialty stores and to corporate
customers under the Ashworth® brand. Ashworth
is also an Official Apparel Licensee of Callaway Golf Company. Ashworth
is also a leading designer, producer and distributor of headwear and
apparel under The Game® and Kudzu®
brands. The Game is a leading headwear brand in collegiate bookstores
and Kudzu products are sold into the NASCAR/racing markets and through
outdoors sports distribution channels, including fishing and hunting.
Ashworth is also the exclusive on-site event merchandiser for the
Kentucky Derby.
For more information, please visit the Company’s
Web site at www.ashworthinc.com.
About the adidas Group
The adidas Group is one of the global leaders within the sporting goods
industry, offering a broad range of products around three core segments
adidas, Reebok and TaylorMade-adidas Golf. Headquartered in
Herzogenaurach, Germany, the Group has more than 34,000 employees and
generated sales of €10.3 billion in 2007.
About TaylorMade-adidas Golf
Headquartered in Carlsbad, California, TaylorMade-adidas Golf sells golf
clubs and balls under the TaylorMade brand and adidas Golf footwear and
apparel. TaylorMade-adidas Golf posted 2007 sales of €804
million.
This announcement does not constitute an offer to purchase or a
solicitation of an offer to sell any securities. The tender offer for
the outstanding shares of common stock of Ashworth described in this
announcement has not commenced. Any offers to purchase or solicitation
of offers to sell will be made only pursuant to a tender offer statement
on Schedule TO filed by a subsidiary of Taylor Made Golf Company, Inc.
with the U.S. Securities and Exchange Commission (SEC) and a
solicitation/recommendation statement on Schedule 14D-9 filed by
Ashworth with the SEC. The tender offer statement (including an offer to
purchase, a letter of transmittal and other offer documents) and the
solicitation/recommendation statement will contain important information
and should be read carefully before any decision is made with respect to
the tender offer. Those materials will be made available to stockholders
of Ashworth at no expense to them. In addition, all of those materials
(and all other offer documents filed with the SEC) will be available at
no charge on the SEC’s website (http://www.sec.gov/).
Forward-Looking Statements
This press release contains forward-looking statements related to
Ashworth, Inc.’s (the “Company’s”)
market position, finances, operating results, marketing and business
plans and strategies within the meaning of Section 27A of the Securities
Act, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements may contain the words “believes,”
“anticipates,” “expects,”
“predicts,” “estimates,”
“projects,” “will
be,” “will
continue,” “will
likely result,” or other similar words and
phrases. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to update any forward-looking
statements, whether as a result of new information, changed
circumstances or unanticipated events unless required by law. These
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. These risks include
the consummation of the recently announced proposed acquisition of the
Company by TaylorMade-adidas Golf, the uncertainties associated with a
potential liquidity shortfall in the first half of fiscal 2009,
implementing a successful transition in executive leadership, successful
resolution of the current dispute with Callaway Golf, the evaluation of
strategic alternatives that may be presented, timely development and
acceptance of new products, as well as strategic alliances, the impact
of competitive products and pricing, the success of the Sun Ice®
and Callaway Golf apparel product lines, the preliminary nature of
bookings information, the ongoing risk of excess or obsolete inventory,
the potential inadequacy of booked reserves, the successful operation of
the distribution facility in Oceanside, CA, the successful
implementation of the Company’s ERP system,
and other risks described in Ashworth, Inc.’s
SEC reports, including the Annual Report on Form 10-K for the year ended
October 31, 2007, quarterly reports on Form 10-Q filed thereafter and
amendments to any of the foregoing reports, including the Form 10-K/A
for the year ended October 31, 2007.
1 Figures based on €/$
exchange rate of 1.3461.