Fascinating to see the news that Titleist has divested itself of Cobra, selling it to Puma:
Acushnet Company, the golf business of Fortune Brands, Inc. (NYSE: FO), announced today that it has signed an agreement for the sale of Cobra Golf to PUMA AG. The sale includes the Cobra brand, as well as related inventory, intellectual property and endorsement contracts, and is subject to customary closing conditions and regulatory approvals.
Wally Uihlein, Acushnet’s CEO, had this to say:
With the sale of Cobra, we have the opportunity to devote all of our resources to the global growth of our industry-leading Titleist and FootJoy brands, said Wally Uihlein, chairman and CEO of Acushnet Company. At the same time, Cobra is a strong brand with a heritage of innovation, and we wish the quality associates guiding the brand future success. Golfers and our valued partners will remain the key focus throughout the impending sale and we are confident that our customers will continue to be serviced to our high standards.
This sort of makes sense when you think Titleist moved Geoff Ogilvy to its main brand and there has been industry talk that Cobra endorsee Camilo Villegas had apparenrly been told to shop for another deal, according to sources, though that came before his recent stretch of fine play. The parent company of Titleist, Fortune Brands, which also sells, among other things, Jim Beam, said the deal will have little impact on its bottom line:
The company said the deal would reduce its 2010 earnings by 2 cents per share before one-time items. In January, Fortune Brands forecast 2010 earnings of $2.30 to $2.80 per share. It expects the sale to result in a one-time gain of five cents a share.
Always interesting when a company divests itself of a lesser brand. In this case Titleist tried to move down market with the acquisition of Cobra, something that didn’t work out. Callaway, on the other hand, tried to go up market with Hogan, and I don’t think that’s been successful either. In the end, the authentic brand is the founding company, and it seems golfers are reluctant to embrace the companies they acquire. There’s long been talk of Nike acquiring Callaway, for instance, but maybe the failure of Cobra is an example of why that hasn’t happen.