Orchestra PE seeks to sell Majesty Golf for around $275 mn

South Korea-based Orchestra Private Equity has placed Majesty Golf Co., a premium golf equipment maker and distributor, on the market. Industry watchers see this is as great timing given the sport's recent rise in popularity due to the COVID-19 crisis.

The PE firm has begun mandating global investment banks to oversee the sale process with plans to distribute an information memorandum to potential buyers early next year, according to the investment banking industry on Dec. 17.

The company's price tag is estimated to be over 300 billion won ($275 million).

Majesty Golf, formerly known as Maruman Golf, was set up as a joint venture between Japan’s Maruman Global Inc. and Korea’s Cosmo Group in 2003. In 2017, Orchestra PE injected around 78.3 billion won to buy a 100% stake in Maruman Korea Co. from Cosmo Group and a 27% stake in Maruman Japan from Maruman Global.

This year, the PE firm acquired the remaining stake in Japan-based Majesty Golf through a takeover bid and delisted it from the Japanese exchange Jasdaq. Following the deal, Majesty Golf's Japanese operation became a subsidiary under the Korea office.

Under Orchestra PE, the company has launched high-end golf club models including Sublime, Prestigio, and Royale to transition into a premium brand. Recently it released a new model, Conquest, targeting younger consumers.

Since the acquisition in 2017, Majesty Golf has seen its revenue climb from around 56 billion won ($51.3 million) to 92.7 billion won in 2019. Its EBITDA also rose from 8.9 billion won to 13 billion won over the same period.

This year, the company is expected to post revenue of 100 billion won ($92 million) with an EBITDA of 25 billion won.

In 2017, Majesty Golf's enterprise value was based on an EBITDA of 10 times, but the PE firm's asking price is likely to apply an EBITDA multiple of 15 owing to improved business circumstances.

The Majesty Golf acquisition in 2017 was the first buyout deal conducted by Kim Jae-wook after establishing Orchestra PE in 2014. Since then, the PE firm has acquired advertising firm Vision Holdings and dart machine maker Phoenixdarts with its No. 2 and No. 3 funds, respectively. 


Write to Jun-ho Cha at chacha@hankyung.com
Danbee Lee edited this article.