TaylorMade has acquired Nassau Golf Co. Ltd.
That’s the headline. The terms of the sale weren’t disclosed. There’s your footnote.
The interesting stuff is somewhere in the middle.
Chances are, even if you’re not keenly aware of it, you are familiar with Nassau Golf. The South Korea-based ball factory has produced numerous TaylorMade balls over the years. It’s also the factory responsible for the original Kirkland Signature four-piece golf ball (the one where the covers didn’t rip) and, perhaps most notably, it produces the MTB Black and MTB X for Dean Snell.
TaylorMade’s Third Ball Plant
The acquisition of Nassau makes for the third ball factory under TaylorMade control. The company owns a plant in South Carolina where it puts covers on TP5 series balls. A 2019 partnership with Foremost in Taiwan is only just ramping up but it has already given TaylorMade greater control over its ball manufacturing process.
A 15-Year Partnership
Nassau isn’t new to TaylorMade. The companies have worked closely for more than 15 years but, as its ball business has grown (it’s up 176 percent over the last five years according to Golf Datatech), keeping up with demand has proven challenging.
TaylorMade CEO David Abeles says the Nassau acquisition is part of the company’s “strategic plan to create vertical integration in the company’s golf ball supply chain.” Ultimately, bringing Nassau into the fold gives TaylorMade complete ownership of the manufacturing process. It effectively gives TaylorMade a factory structure not dissimilar from Titleist, Bridgestone, Callaway and Srixon.
Bottom line: acquiring Nassau gives TaylorMade both capacity and control.
That’s a hell of a combination.
As we’ve said before, as TaylorMade’s ball business has grown, it’s needed more capacity. The trickle-down impact of that has been a squeeze on some of the smaller direct-to-consumer brands serviced by those same factories.
If you’re wondering why your favorite DTC ball is perpetually out of stock, chalk it up to supply, demand and pecking order inside the top-tier Asian factories where TaylorMade is the top dog. It’s the reason why some, most notably Vice, have begun sourcing balls from lower-tier factories.
While the acquisition of Nassau will certainly give TaylorMade greater manufacturing capabilities, the unknown is what it means for the smaller brands, most notably Snell Golf, which rely on Nassau.
Will TaylorMade be content to carry on Nassau’s role as a supplier and give smaller competitors enough manufacturing line time needed to produce a reasonable quantity of balls or will it focus totally on its own golf balls, forcing smaller brands to take their business elsewhere?
It’s probably too soon to tell but it goes without saying that TaylorMade’s acquisition of Nassau Golf could have a significant impact on the golf ball industry.