Resilience, Zapis Family Tap In Golf Investment –

Resilience Capital Partners is the latest firm to throw its hat into the golf arena, with its acquisition of Slazenger Golf Products. The firm teamed up with the Zapis Family Group to complete the two-part deal, which included the purchase of the licensing rights from Dunlop and the acquisition of inventory and other assets from Taylor Made-adidas Golf. The transaction closed Nov. 13.

The licensing arrangement gives Slazenger the exclusive right to sell Slazenger-brand golf products in the U.S., Canada, Mexico and the Caribbean Islands.

Terms of the deal were not disclosed, but Bassem Monsour, a managing partner with Resilience, indicated that the company does fit within the firm’s $10 million to $100 million enterprise-value range. He said Resilience provided a controlling equity contribution, while the Zapis Family Group supplied a significant minority share. Provident Bank, meanwhile, provided senior debt to help finance the deal, but Monsour noted the equity portion represents “more than is typical in a leveraged buyout,” in order to “capitalize the business appropriately to support growth initiatives.”

Slazenger’s primary products include golf balls, apparel and other related accessories such as golf gloves. The company’s panther crest logo has adorned balls used by Harold Hilton at the turn of the 20th century and famed South African golfer Bobby Locke, who is attributed to the quote, “You drive for show but you putt for dough.” Today, Scott McCarron can be seen sporting Slazenger’s apparel while on tour.

Monsour cites the strength of Slazenger’s brand as one of the factors that led Resilience to the deal, and added that the company has a “very strong” position in the spaces it occupies. He conceded, though, that the company has “not been operating at its fullest potential.” Most recently, Slazenger contributed an unspecified amount to the $76 million in sales that Taylor Made-adidas Golf’s Maxfli Golf division reported for the first three quarters of this year. Still, Resilience views the company’s underperformance as an attribute, and believes there is significant upside potential for Slazenger. Monsour estimated that the company possesses “double-digit growth potential” for both revenues and cash flow.

Resilience and the Zapis Family installed Brian Sokol as the chief executive officer of the company. Previous to Slazenger, Sokol was the head of Blue Coral, which is best known for its car polishes and waxes. The company will retain its existing sales force and move its corporate headquarters to Cleveland, while maintaining its customer-service and order-fulfillment operations in Greenville, S.C.

As it looks to boost Slazenger’s growth, Monsour said the firm would continue to focus on green-grass distribution, or its sales through country-club and on-course pro shops. Additionally, the firm will attempt to diversify both the products and its distribution channels. Specifically, Resilience will be looking to expand its distribution channels into the off-course specialty markets and the firm will also “take a renewed look at the ball side” of the business, as sales have been relatively soft of late.

However, the current economic environment has presented the golf industry with a number of traps lately. “As a whole, the general decline of the U.S. economy over the last two years has impacted the golf apparel industry as much or more than any other within the country,” said Kevin M. Tomlinson, CEO of Sport-Haley, a publicly held golf apparel company, in a statement accompanying its latest earnings report. And with new entrants into the balls market, including introductions by heavyweights Nike and Callaway in the past few years, that space is getting increasingly crowded. Fortune Brands, the maker of Titleist and Pinnacle golf balls, substantiated this with its decision in the third quarter to close its ball manufacturing facilities for an extra week in order to balance its inventories.

Resilience Capital Partners is primarily an M&A and restructuring advisory firm and through its Resilience Fund LP, the firm also makes private equity investments in financially distressed companies. Resilience was founded in 2001. The Zapis Family Group, meanwhile, has been around since 1999 and actively invests in real estate, technology and turnaround opportunities. Both firms are based in Cleveland.