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Golf equipment maker Taylormade to refinance $222 mn of debt

Seoul-based PE Centroid is in talks with potential bidders in Korea to refinance the mezzanine loan

One of the South Korean owners of Taylormade Golf Co., a leading global golf equipment maker, is set to refinance its 300 billion won ($221.7 million) out of 463.3 billion won mezzanine loan for lower interest rates, banking sources said last week.

The investor, Seoul-based private equity firm Centroid Investment Partners LC, is in talks with domestic brokerage houses and banks for refinancing, sources added.

Centroid and Korean fashion retailer F&F Co., as a strategic buyer, jointly acquired Taylormade for around $1.7 billion in 2021. Centroid raised 1 trillion won in senior loans, 463.3 billion won in its mezzanine fund and 605.9 billion won in its equity fund for the deal.

With new creditors such as J.P. Morgan, Morgan Stanley and Bank of America, Centroid has refinanced the senior loan from 48 previous lenders including global hedge funds and asset management firms.

Centroid has lowered the interest rate on the senior loan from the high 4% to the low 3% per annum, saving the PE house’s annual interest expense by 20 billion won.

To finance the Taylormade acquisition, Centroid established a special purpose vehicle in 2021 to issue redeemable preferred stocks (RPS) with a 10.5% yield to maturity. Centroid plans to repay the principal investment and interest through a revolving credit facility.

Centroid has ramped up its golf business portfolio via additional investments.

In 2022, the PE house joined hands with California-headquartered Clearlake Capital Group LP to acquire Florida-based Concert Golf Partners, which operates around 30 private clubs across the US, for 500 billion won.

In February of this year, Centroid launched Sun Day Red, a golf clothing brand within Taylormade, with golf legend and Taylormade ambassador Tiger Woods.

Write to Jeong-Cheol Bae and Seok-Cheol Choi at bjc@hankyung.com