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After more than a month of rumors surrounding the possible sale of Quicksilver's (NYSE: ZQK) Cleveland Golf subsidiary, the deal is done. Quiksilver announced the sale last night, and will collect $132.5 million from SRI Sports, based in Japan.It's interesting because it's roughly double what industry experts were initially estimating the company would sell for. Back in September, GolfWeek wrote that "Industry sources say Quiksilver Inc., which acquired Cleveland in 2005 as part of a deal to buy ski-maker Rossignol, is in the final stages of unloading the golf equipment maker for roughly $60 million to $70 million. Some analysts say the price is a bargain, noting Cleveland likely is worth at least $100 million, but they add an expedient sale even at a discount is in Quiksilver's best interests."
Recently, I've written about a stock I own called Adams Golf (OTC BB: ADGO), which I believe is very undervalued, in large part because of some corporate governance issues and managerial apathy toward the stock price (which is a good thing in moderation, but Adams may be at the opposite extreme). Using the sale of Cleveland Golf as a guide, I am convinced that Adams shareholders would be rewarded very handsomely if the company's board explored sale options. Take a look at some of the key stats
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