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The Loop

Morgan Stanley sends out "teaser document" on Acushnet

February 02, 2011

Another step has been taken as Fortune Brands seeks to potentially sell off the Acushnet Co. Although it would appear to be a small one, it is large in the sense that it sets the wheels towards a sale officially in motion.

Morgan Stanley, the investment firm tabbed to find a suitable buyer, has prepared a "teaser" document on the Acushnet Co. (comprised of the Titleist, FootJoy and Pinnacle brands) and has sent it out to some parties who have inquired about the golf equipment company.

In plain English, a teaser document is a concise summary (in this case, just two pages) that puts forth a general overview of the business. Because the document can be seen or requested by a fairly large number of business interests, they do not include confidential information. Rather, they are done to generate interest and perhaps an additional request for more information.

In the case of the Acushnet teaser, the information would be well-known to anyone familiar with the company as it cites its heritage, dominance in golf balls and footwear, its brand recognition and loyalty, as well as its strong record in sales and service. Interestingly, it also cites the company's growth in Asia -- a geographic market believed to be the source of potential suitors.

The document breaks down the company's business as 43 percent golf balls, 22 percent clubs, 17 percent shoes, 10 percent accessories and 8 percent gloves. It states that 60 percent of the company's business is done in the Americas with 25 percent in Asia and 15 percent elsewhere.

The logical next step after a teaser document is an offer memorandum, which is a more detailed document sent out only to parties proving serious interest and financial capability. Stay tuned.

-- E. Michael Johnson