PE Firms Lead Acushnet Sweepstakes

Over the weekend, Fortune Brands CEO Bruce Carbonari updated the golf world by saying, "..there is very active interest from a broad range of perspective buyers." Of course there is, Bruce.

Despite all the reports though, according to sources in the business, there are only two realistic outcomes of the Acushnet situation: They will either be sold to a Private Equity firm or spun off from their parent to run independently. Here's why:

As far as an industry sale is concerned, the redundancies outweigh the synergies for potential buyers. The double dipping in footwear brands should alone keep Nike and Adidas out of the running. In addition, lingering anti-trust concerns should prevent another industry competitor, namely Callaway, from getting a deal done.

Golf media companies, whose revenues are highly dependent on selling ad inventory to equipment manufacturers, are wary of this as any industry consolidation (of an already consolidated industry) would spell less demand/competition for their precious ad space.

No need to worry though. 

Reports are that Blackstone Group - previously assumed to be bidding alongside Callaway - will now be going in alone. Going in sans Callaway eliminates the anti-trust concerns, thus paving the way for Fortune Brands to fetch close to their $1.3 billion asking price from a highly capable buyer. Additionally, word on the Street is that two other PE firms will be placing bids some time today. In the end, PE firms are flushed with cash, motivated, and looking to buy at early on in the cycle. They also don't have redundancies or anti-trust concerns to detract from any deal value. This should allow Fortune to avoid a spin off and find a fit with a motivated buyer in the investor community.