Golf-equipment maker’s IPO is the first deal from a golf company since Acushnet in 2016
Sacks Parente Golf Inc.’s stock closed up a stunning 624% Tuesday on its first day of trading on the Nasdaq, after the company upsized its initial public offering at pricing.
The deal priced at $4 a share, the low end of a proposed range of $4 to $5, and was last quoted at $19. Sacks Parente Golf SPGC, +624.25% shares dropped around 7% in the extended session Tuesday.
The company sold 3.2 million shares to raise $12.8 million via sole underwriter the Benchmark Company, with proceeds earmarked for expansion into Asia, marketing and professional-tour-related expenses and working capital, among other things.
With 13.8 million shares to be outstanding after the deal closes, the company had a valuation of $55.2 million at pricing. The stock is trading under the ticker SPGC.
The company is not profitable. It had a net loss of $3.5 million in 2022, wider than the loss of $302,000 posted in the year-earlier period. Revenue fell to $190,000 from $200,000 in 2021.
“We design, manufacture and sell technology-forward, high-quality golf equipment, which is comprised of putting instruments, golf shafts, golf grips and related product groups,” the company said in its IPO filing documents.
Matthew Kennedy, senior IPO market strategist at Renaissance Capital, a provider of IPO exchange-traded funds and institutional research, said the last golf IPO was that of Acushnet Holdings Corp. GOLF, -1.84%, parent of the Titleist brand, in 2016.
Topgolf was a rumored IPO candidate before it was acquired by listed Callaway Golf in 2021 for about $2 billion. Callaway, which subsequently changed its name to Topgolf Callaway Brands Corp. MODG, -3.45%, is the leader in the space.
“Golf equipment is certainly a competitive industry, with established brands owned by Acushnet and Callaway, major sports-equipment companies like Wilson and Puma, [private-equity]-owned brands like TaylorMade, etc.,” Kennedy told MarketWatch.
The deal comes at a time when the sport is enjoying somewhat of a renaissance, Kennedy said, boosted in part by casual games like TopGolf, a high-tech game played at special complexes that offer food and drinks, much like bowling.
Sacks Parente is still an early-stage company and makes its equipment at a plant in Missouri.
“The company’s putters are currently priced at around $400, a price point that is not at all exclusive to golf pros — plenty of golf enthusiasts will shell out $400 for a putter if they think it can reduce their stroke count,” Kennedy said.
The Renaissance IPO exchange-traded fund IPO has gained 30% in the year to date, while the S&P 500 SPX has gained 16%.