The Wall Street Journal has confirmed what’s been floating around the golf ether for several days now: L.A.B. Golf is being sold to the private equity firm L Catterton for $200 million.
You can file that one under shocking, but not surprising.
It’s shocking any time the owners of a brand with a loyal (and growing) fan base and an industry-leading technology sell their company. However, if you’ve read the tea leaves correctly over the last two years, it’s a move that was all but inevitable.
For those ready to sound the death knell because L.A.B. is being sold to a private equity firm, some context is in order.
L.A.B. Golf sold: The details
L.A.B. Golf owner Sam Hahn and his partner Bill Presse (the inventor of Lie Angle Balancing) are selling a controlling interest in their company to L Catterton. With more than $37 billion in assets under management, L Catterton is the largest consumer-focused private equity firm in the world.
Hahn confirmed the sale last night on the L.A.B. Rats Facebook page.
“We’ve been pursuing a transaction of sorts for almost two years now and could not be more excited about our new partners.” In typical Hahn style, he calls the people at L Catteron, “Dope AF.”
“We knew any existing OEM would have just dissolved the brand or dramatically changed its principles and values,” he wrote. “We needed more than financial support, but some real input and know-how from folks who have taken badass brands global.”
That, in a nutshell, describes L Catterton’s modus operandi. It’s a little different from what you think you know about private equity firms. It specializes in investing in middle-market and high-growth potential consumer brands, providing operational support and global expansion strategies for growing companies.
L.A.B. Golf clearly fits that bill. It sold an estimated 130,000 putters in 2024 and is expected to triple that number in 2025.
The private equity “willies”
Usually, when a company is sold to private equity, its fans become so gloomy they make Eeyore look like a bubbling optimist.
“For many, just hearing ‘PE’ can give you the willies,” said Hahn on Facebook. “Having met with a dozen different firms over the last two years, I can totally understand why. (They) kill the culture, lower the quality, squeeze margins, prioritize profit, overspend on marketing, underspend on R&D and look for a profitable exit.”
L Catterton, he says, is different.
“They operate the same way we do: Make ZERO concessions on quality, take care of your customers, and the rest will take care of itself.”
Hahn also said there will be no significant changes to L.A.B. Golf operations. He’ll be staying on in his current capacity before transitioning into a product and innovation role as the company grows. He also says the bulk of manufacturing will remain at the company headquarters in Oregon.
Why the L.A.B. sale was inevitable
Hahn started L.A.B. Golf in 2018 after acquiring the skeleton of Bill Presse’s nearly bankrupt Directed Force Company. After five years of slow, steady growth, L.A.B.’s fortunes took a drastic upward turn in August of 2023, thanks to Lucas Glover. That’s when Glover switched to a L.A.B. Mezz Max putter and went on the run of his career: six top-six finishes in six starts, including back-to-back wins at the Wyndham Championship and the FedEx St. Jude Championship.
L.A.B.’s presence had been growing on the PGA Tour but Glover’s run opened floodgates that nearly drowned the staff at L.A.B.’s Oregon facility.
“We were as prepared as we could have been,” Hahn told MyGolfSpy at the time. “Obviously, you can’t hire enough staff to accommodate 20,000 orders when you’ve only been doing 5,000. You just have to grab hold and do your best.”
Greater Tour acceptance and J.J. Spaun’s winning putt at this year’s U.S. Open have only added to demand.
Hahn said on Facebook he’d been talking with investors for the past two years, which would coincide with Glover’s hot streak. Without outside investment, L.A.B. Golf likely would not have been able to sustain the growth it had spent the previous five years chasing. Getting the necessary funding would invariably have to include giving up a majority stake in the company.
Is this a good thing or a bad thing?
Even if you do have the “private equity willies,” L Catterton’s track record indicates it’s not a quick-buck kind of PE firm.
Its brands include heavyweights such as Birkenstock, Flexjet, the live entertainment platform Fever and Italian fashion house Etro. Nothing in its past suggests “burn and turn.”
Even L Catterton’s heritage comes from long-standing classic brands. In 2016, it merged with LVMH, one of the world’s largest luxury goods conglomerates. Its initials stand for three of its founding brands: Louis Vuitton, Moet & Chandon champagne and Hennessy cognac. L Catterton says it leverages that relationship to collaborate on consumer insights, brand strategy, global expansion and operational efficiencies.
If you’re so inclined, you could conclude that PE will ruin L.A.B. while Hahn and Presse take their money and run. That’s the easy – and borderline lazy – take. It might prove to be correct, but to immediately go there without understanding the players involved is, at best, uninformed.
The other way to look at this sale is that it’s the logical and inevitable step in the life of a small business that’s on the verge of outkicking its coverage. L.A.B. has been a runaway train since Glover’s run two years ago. Almost overnight, it went from an oddity to the hottest putter in the game that now sits in third place in putter market share.
That kind of growth can cripple a company unless it gets some kind of investment.
If we are to take Hahn at his word, and we’ve known him long enough to believe him to be a straight shooter, this second take becomes more reasonable. In other words, if something like this didn’t happen, L.A.B. would likely have collapsed under the weight of its success.
HikingMike
11 months ago
“In other words, if something like this didn’t happen, L.A.B. would likely have collapsed under the weight of its success.”
Why would LAB have collapsed? They may have trouble keeping up with demand, but like they say, that’s a good problem to have. They would be doing just fine as long as they are charging enough for their putters. There’s nothing wrong with small companies staying small.
So in my opinion, this article is not the right take. Or you can call it a charitable take.
“Hahn said on Facebook he’d been talking with investors for the past two years, which would coincide with Glover’s hot streak. Without outside investment, L.A.B. Golf likely would not have been able to sustain the growth it had spent the previous five years chasing.”
Of course he talked with investors for 2 years. I’m sure investors really wanted to talk to him, because they go after growth. Ok, well they did have a ton of growth over these 2 years, and they did it without private equity, right? They hadn’t sold until now. And actually now, suddenly there are plenty of other zero torque putters on the market, and still more coming out soon. And after talking to investors for 2 years, NOW Sam Hahn sells.
So to me, this points to a change in the growth stage of the company. This makes sense. They didn’t have much competition in their niche, but now they do. They will have far less differentiation by pure technical characteristics. They don’t have (much?) patent protection since zero torque has been done before. So to maintain their position and grow, they would want to consolidate everything and make the most of their extraordinary growth run. Cement their gains by juicing their brand so everyone knows who they are. Putting energy into the brand name will pay off longer term once novelty and buzz has worn off. Also, they already have vertical integration, but now they can do horizontal integration. Maybe they make different products, something besides putters. This is what you do while you have an advantage, before that advantage starts to disappear. And this is also something that might require funding. They probably don’t need funding to just gradually make and sell more putters. On top of that, Sam will have help dealing with the things that are required when a company gets bigger, and he can have more freedom to work on side of the business he wants to.