Private equity (PE) firm Orchestra Advisors Korea has hired Goldman Sachs to sell its wholly-owned golf equipment company Majesty Golf, sources said on Thursday (February 18), with the firm expected to fetch about 300 billion won ($270 million).
The sale manager is likely to send out teaser letters to potential investors this week.
Orchestra PE acquired a 100% stake in Maruman Korea, now Majesty Golf Korea, and a 29% stake in Maruman Japan (Majesty Golf) from Cosmo Group for 78.3 billion won in 2017. It bought the remaining stake in JASDAQ-listed Majesty Golf for 38 billion won and delisted the company. Yuanta Securities provided acquisition financing.
Majesty Golf has grown at a rapid pace since the acquisition, with the company streamlining its range of brands from around 30 to just four main product lines. The company name was also changed from Maruman to Majesty.
Majesty’s market share in the South Korean premium driver market increased to 52% last year thanks to efforts to diversify its products and target golfers in their 30s and 40s. Majesty posted revenue of 80.8 billion won and adjusted earnings before interest, taxes, depreciation and amortization of 22.8 billion won in 2019, or increases of 15.8% and 45.8% on the previous year.
Numerous strategic investors and private equity firms at home and abroad are reportedly showing interest in the company, attracted by its improving financial performance and a boom in golf markets due to the Covid-19 pandemic.
“Not only domestic conglomerates but also foreign potential buyers are interested in the company,” said an industry source, adding, “The company may be sold at a higher than expected price if the competition gets more intense.” (Reporting by Se-hun Jo)