Nature Holdings beats Shinsegae, CJ to join TaylorMade deal

The Nature Holdings, a South Korean importer of popular apparel brands such as National Geographic, Jeep, NFL and Vera Wang, has been chosen as the strategic investor in the $1.7 billion purchase of TaylorMade Golf Co. 

Last month, Seoul-based private equity firm Centroid Investment Partners has acquired the whole ownership of the US sports equipment manufacturer from New York-based KPS Capital Partners. 

As the strategic partner for the acquisition, Centroid picked Nature Holdings over retail giant Shinsegae, food conglomerate CJ Group, tire maker Nexen Corp. and F&F Co., an importer of the Discovery apparel brand, according to investment banking sources on June 13. All the Korean companies competed to participate in the largest-ever acquisition in the golf goods industry.

Nature Holdings will inject around 100 billion won ($90 million) into a Centroild-led consortium to finance the purchase. It will be also given the right to take over stakes from financial investors in TaylorMade ahead of others.

Listed on the junior Kosdaq market, Nature Holdings distributes a number of foreign clothing brands in South Korea under licensing agreements. It is the only licensed retailer of the National Geographic apparel, accessories and camping gear outside the US, gaining popularity among those in their 20s and 30s.

Founded in 2004, it recently renewed the licensing agreement with Disney to sell Disney clothing, accessories and gifts at major department stores, road shops and online platforms across the country.

"We concluded the Nature Holdings is the perfect partner to grow TalyerMade's clothing business, given its experience of leading the rapid growth of the National Geographic brand (in South Korea)," a Centroid official was quoted as saying by a local newspaper. "We will target the MZ generation that is emerging as a major force in the golf industry."

The MZ generation encompasses millennials and Generation Z, or those born between 1980 and early 2000.

Last year, Nature Holdings' operating profit nearly surged 40% to 55 billion won with sales up 24% to 291 billion won.

EYEING NEW YORK LISTING

TaylorMade is one of the world's three-largest golf equipment manufacturers, along with Acushnet Holdings and Callaway. It is also the sponsor for many noted PGA Tour players such as Dustin Johnson, Rory McIlroy and Tiger Woods. Acushnet is the owner of global top golf brands such as Titleist.

Down the road, Centroid Investment plans to list TaylorMade in New York Stock Exchange where Acushnet and Callaway are traded.

Nature Holdings seems to envision it as the next Fila Korea. Back in 2007, then the Korean operations of Fila absorbed its entire global business and then participated in the $1.3 billion Acushnet acquisition as the strategic buyer in 2011. At the time, Fila Korea had injected $100 million from its balance sheet. 

The 2016 US IPO of Acushnet generated double-digit returns to its financial investors, including the National Pension Service.

For the TaylorMade deal, Shinyoung Securities Co. arranged the acquisition financing worth around $900 million, attracting MG Korean Federation of Community Credit Cooperatives as the anchor investor. The country's National Agricultural Cooperative Federation and a number of brokerage companies will also finance the transaction, alongside global institutional investors.

Write to Chae-yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article.