The German company will pay $10.80 a share in cash for Plano, Texas-based Adams, whose clubs are used by players including Tom Watson and Kenny Perry. The transaction is expected to close mid-2012, Adidas said today in a statement.
The offer price is 71 percent higher than immediately prior to Adams’ Jan. 4 announcement that it hired Morgan Stanley to review strategic alternatives that may include a sale. Adidas, which gets almost 8 percent of revenue from TaylorMade, said the deal will be financed through cash or existing credit lines.
“This acquisition reflects our commitment to continued growth in the golf category,” Adidas Chief Executive Officer Herbert Hainer said in the statement.
Adams Golf rose as much as 9.5 percent in New York trading and was up 8.8 percent at $10.73 as of 1:17 p.m. Adidas fell 0.1 percent to 59.03 euros at the close of trading in Frankfurt.
Adams Golf, founded by Chairman Barney H. Adams in 1987, boosted sales 12 percent to $96.5 million in the 12 months ended Dec. 31. After posting a net loss of $12.2 million in 2009, the company has made money in seven of the past eight quarters.
“This merger provides strong opportunities for our employees, suppliers and partners,” Adams said in the release.
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