Korea buys Fortune’s golf company for USD 1.2 billion

Guess the Koreans are into golf as much as the Japanese. Titleist, one of world’s best-known golf equipment names, is getting a new owner after alcoholic drinks maker Fortune Brands clinched a deal to sell the brand to Fila Korea Ltd for USD 1.23 billion at the end of May 2011.

Fortune Brands, a hugely diversified company with products ranging from faucets to drinks and golf equipment, is preparing for a break-up. Shareholder activists think that the individual parts are more valuable than the whole.

The first unit to go is the golf subsidiary Acushnet, which makes Titleist golf balls, clubs and other equipment.

Fila Korea has owned the Fila footwear and clothing brand since 2007. Fila was established in Italy in 1911.

Buying Acushnet – based in Fairhaven, Massachusetts and named for the Massachusetts town where it was founded in 1932 – makes sense for Fila and its partners, which include Mirae Asset Private Equity, National Pension Service of Korea and Korea Development Bank, it was reported.

Nearly half of the Acushnet’s 2010 sales of USD 1.24 billion came from markets outside the United States. The unit had an operating income of about USD 80.2 million last year.

The deal values Acushnet just below 10.5 times 2011 estimated EBITDA.

Fortune expects net proceeds of about USD 1.1 billion from the sale.