This week, Casey reports recent business and equipment news from the Childrens Miracle Network Classic presented by Wal-Mart at the Walt Disney World Resort in Lake Buena Vista, Florida.
On October 30, Quiksilver, Inc. announced that it had reached a definitive agreement to sell 100% of the stock of its Cleveland Golf Company, Inc. subsidiary to SRI Sports Limited, based in Japan. SRI Sports Limited controls Srixon.
The transaction value is $132.5 million and the transaction is expected to close during the fiscal quarter ending January 31, 2008. Net proceeds from the sale will be used to repay existing indebtedness. Quiksilver originally acquired a portion of the interest in Cleveland in its July 2005 acquisition of the Rossignol Group. The remaining interest was acquired in a separate transaction in September 2007.
This transaction resulted from Quiksilvers initiative, first announced in June 2007, to explore strategic alternatives to reduce its exposure to the hardgoods manufacturing businesses. Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, We are very pleased to have reached a compelling transaction with SRI Sports. While we believe that Cleveland is the best up-and-coming brand in the golf market with significant growth opportunities, it is not a strategic asset for us as we strive to maximize our core businesses and brands.
Ryochi Sawada, Chairman of the Board of SRI Sports Limited, commented, We are very excited to add the Cleveland brand and business to our operations. Cleveland has a clear position of dominance in the important wedge market and a fast-growing presence in drivers and irons. We believe that this business will prove highly complementary to our own. We are looking forward to demonstrating Clevelands full potential to the market and believe that the business can benefit greatly from our stewardship.
Greg Hopkins, President of Cleveland Golf Company, Inc, commented, We are excited by the many positive aspects of this deal, including the combination of a great brand in golf with a new organization that is completely and solely devoted to the sport. Significantly, their operating model is set up to anticipate and respond to the seasonality and other specific requirements of the golf market. We believe that this singular focus will benefit the entire Cleveland organization in a number of ways. Each of the three companies involved - Cleveland Golf, Quiksilver, and our new parent SRI Sports benefit in significant ways as this transaction will positively affect the futures of all three companies.
NIKE GOLF, Rob Burbick, PGA TOUR Representative
We have had a fantastic year where professional golf is concerned. It wasnt easy to top last year. Last year was a record for us in wins and so many Nike guys being successful. This year Lucas Glover was great for usdid so well in the Presidents Cup. Chad Campbell and Justin Leonard back in the winners circle. K.J. Choi has had an incredible year. Thats huge for us. Tiger ' it goes without saying ' he had another amazing year. Weve brought some exciting new equipment out here on TOUR that will be released to consumers over the course of the next few months and that is always exciting. When you see stuff tested out here by the best players in the world and then eventually that same equipment makes its way in to the hands of the golfing public, that is just great. We like to see that. And, most exciting for us as a group ' the team of Nike Golf tour reps ' we have just brought our brand new tour van out on the road. I think you guys are going to do a story for TV soon on that so we wont tell your readers too much about it. But, this is our second week out on TOUR with it and it has been really enjoyable. So, each year Nike Golf just gets better and better and we are all very much looking forward to 2008.
UST GOLF SHAFTS, Jim McIntosh, PGA TOUR Representative
Its been another outstanding year for UST. Weve had nine driver wins this year. Sixteen total wins on the PGA TOUR with players using UST shafts. The V2 is still very strong as we saw in the Presidents Cup and in the majors. And weve had some fun stories this year. Like Chad Campbell in Mississippi, for example. Hes been fighting his driver left for quite some time. He had a 65 gram shaft in there and it really wasnt working for him. So Rob Burbick from Nike Golf and myself had an idea how we might be able to help Chad. We decided to go a little bit heavier in gram weight in the shaft. We tried the new AXIV in the 75 gram weight. As you know, Chad loads the club a little bit differently than some other players do. He tends to be a little bit quicker on the downswing. So we thought if we could create a little bit of extra lag ' and the extra weight in the shaft does that ' the clubface would stay open for him just that spit second longer. And low and behold, the first couple of drives he hit with it the ball went right and he had a huge smile on his face. Then a couple more drives and Chad got the feel for it and just started bombing the ball but with no fear of going left. And he ends of winning the tournament.
And with Justin Leonard, he had been playing a 63 gram shaft up until the TPC. I mentioned to Justin that we had a new shaft ' the AXIV XT 60 ' that I was actually looking for some feedback on. It was a brand new product at the time. Justin put that in at TPC on Tuesday and the ball flight was just great. He immediately picked up yardage ' 15 and even 20 yards in some cases - and he really liked the trajectory he was seeing. He liked it enough that we built him a backup driver the same day. And, of course, he went on to win this year. But not just because of the equipment. Justin went back to Randy Smith and I think that has made a huge difference for him. I really believe that Justin has what it takes to be a top 30 player again. Hes just that good. So it was nice to be able to help him find a shaft he really likes. And the cool thing is ' as happens with so many of these guys out here ' it really started out by Justin doing us a favor. And that was to give us feedback on a brand new product.
PING, Matt Rollins, PGA TOUR Representative
PING has had just an outstanding year on TOUR this year. Its been a lot of fun. Five wins for PING this year on this TOUR for us as opposed to just one win last year. PINGs first major win since 1991 ' the U.S. Open ' with our staff member Angel Cabrera. So that was just fantastic for PING. As far as product, the new G10 has been going gangbusters. A lot of the guys have switched from the G5 in to the new G10 product. And of course the Rapture line continues to do well for PING on TOUR and at retail. So we actually hope that guys out here continue to play both productsG10 and Rapturebecause they are both current products. Id say its about 50-50 for us with our staff right now. But the great thing for what we do out here on TOUR is we havent had any issues with our players. We dont have any of our players saying, you know, I just cant play the product. And that has really been since the G2 line first came out. In irons we have guys playing the i10, the s58there really arent any i2 iron sets left in the guys bagsthe only guy I know out here who plays i2 irons is Tim Herron. But hes not on our staff. But were happy that he is playing them. We used to have quite a few of our guys try our new stuff but then gravitate back to the i2 irons. That is no longer the case. We have a blade now, we have a tour size cavity back now, we have a little bit larger of a cavity backso the guys have everything they need to choose from. And it really has been a fun and rewarding year for PING out here on TOUR.
TRUE TEMPER / GRAFALLOY, Bob Montgomery, PGA TOUR Representative
Casey, this has been a terrific year for True Temper and for Grafalloy. The Pro Launch Red has won repeatedly on the European Tour and the Nationwide Tour. We had a great win last week with Daniel Chopra playing Black Gold in his ironsa shaft we introduced about 18 months ago. We had Omar Uresti win with those same shafts on the Nationwide Tour. So we have seen some very good success and progress this year. You know, Casey, True Temper bought Royal Precisionthe makers of Rifle shaftsand that includes the Project X model that you see used out here by many of the TOUR players. And any week out here on TOUR, 20 to 30 percent of the players will use shafts in their irons that are in the Rifle family of products. And 65 to 70 percent each week, the players out here on the PGA TOUR are using shafts in the True Temper family. That is a dominant position in the iron shaft category that is pretty hard to argue with. These are the best players in the world and they can play any shaft they want. And almost all of them play a True Temper or Rifle product. So as you can imagine, I stay pretty busy out here on TOUR. But its a nice problem to have. There is some very exciting new products coming for 2008some new graphite product that will be out early next year. And we are also launching a new Dynamic Golf high launch shaft that we have done some prototype testing with out here on the regular TOUR and the feedback on that has been terrific. That shaft will be launched with a couple of the major club manufacturing companies as standard equipment and those opportunities are very important as True Temper looks to continue to be the number one shaft company in the world.
CALLAWAY GOLF / ODYSSEY PUTTERS, Jeff Opheim, PGA TOUR Representative (Odyssey Putters)
Editors Note: Jeff Opheim was just named Callaways PGA TOUR representative for Odyssey Putters. Jeff worked for Odyssey Putters as an independent sales rep from 1993 to 1997 before the company was purchased by Callaway in 1997. Iin 1998 he became a tour rep on the LPGA Tour for Odyssey where he worked for ten years. This will be Jeffs first year on the PGA TOUR with Odyssey.
This year, as you know Casey, has been the most successful year ever in professional golf for Odyssey. And that really is across all tours worldwide. There is a very broad selection of product that the best players in the world have to choose from. And the insert technology that we offer gives players a wide range of feel. There are four or five different face hardness characteristics we can offer players. So when you combine the number of models of putters with the number of face hardness feels we offer, thats a pretty tough combination to beat. And you know, its just a darn good product. And success breeds success. When players win with a certain putter then other players take note and thats how things build and build and build. And that is what has happened with Odyssey, especially this year. 2008, I believe, will be another homerun year for Odyssey. We have some great new product coming out that will help us build on the success from 2007. It also helps that Odyssey is the number one putter on the European Tour and the Japanese Tour. So when those players come over here and either play on or join the PGA TOUR, this helps us on the PGA TOUR as they continue to play with Odyssey Putters. And you know, Casey, for me, starting as a salesman for Odyssey way back when, to see the success the brand has now is just incredible. Odyssey was a little company that was started by some guys who came together from several different putter companies. And when Callaway acquired Odyssey it just changed everything. Im not sure people fully appreciate the scope of Callaways brand reach around the world in golf, but it really is something special. In virtually every corner of the globe where golf is played, people know and love the Callaway and Odyssey brands. The worldwide distribution of both Callaway and Odyssey is really amazing.
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