The biggest name in golf might go public next year. Photo: Michael Patterson via Flickr.

The past few years have not been the best time to hit the links, or at least not to invest in the golf industry. However, with one of the biggest names in the business looking to go public, some might feel that is about to change.

Acushnet, which owns the iconic golf ball brand Titleist, as well as FootJoy, Pinnacle, and others, is reportedly looking at an IPO that might value the business at some $1.8 billion.

Although Tiger Woods is playing in the largest professional golf tournament on the PGA Tour, the Phoenix Open, for the first time in 15 years as he angles to win back his No. 1 world ranking, and the sport will be an official Olympic sport at the summer games next year -- the first time since 1904 -- leading some enthusiasts to hope the sport will see a renaissance again, this still might not be the best time to invest in a golf IPO.

Broad public gets in on the game
A decade ago, golf was scorching hot. The U.S. economy was booming, Woods was tearing up the links, and companies were willing to spend hundreds of millions of dollars to get in the game. These were some of the biggest deals in the sport during that time:

  • Dick's Sporting Goods (NYSE:DKS) bought specialty retailer Golf Galaxy for more than $200 million.
  • Fortune Brands Home & Security (NYSE:FBHS) once derived almost a fifth of its revenue from ownership of the Titleist and Cobra golf club brands.
  • The dudes at surf-and-skate shop Quiksilver acquired Cleveland Golf as part of its $320 million deal for Rossignol skis

But then the economy plunged into a recession and Woods' got caught up in embarrassing extramarital escapades and struggled on the golf circuit, leaving the leaderboard seemingly lacking for talent. The industry appeared to follow him down.

  • Cleveland Golf was sold to Japan's SRI Sports for $132 million in 2007.
  • Adidas (OTC:ADDYY) acquired golf apparel maker Ashworth for less than $73 million in 2008.
  • Golf club shaft maker Aldila voluntarily delisted its shares from the Nasdaq stock exchange in 2010.
  • Fortune sold the golf business for $1.2 billion in 2011 as it turned to distilling spirits.
  • Dick's fired over 500 golf pros at its stores last year and began folding the stand-alone Golf Galaxy stores into its namesake locations. It is now looking to go private in part because of its faltering golf business.

Even Nike (NYSE:NKE) says its golf business is struggling. In its fiscal 2015 second-quarter earnings report last month, the company said revenue grew in all geographies across all categories except one: golf. For fiscal 2014, golf sales fell slightly from the prior year, to $789 million.

A golf powerhouse brand
Acushnet was bought in 2011 for $1.23 billion by a group of investors consisting of Korean sports conglomerate Fila Korea, P/E firm Mirae Asset Global Investments, Blackstone, and Neoplux, the private equity vehicle of the Korean Government Pension Service.

The chance to drive sales higher by capturing greater market share could make Acushnet a big player on the links. Photo: Yanki01 via Flickr.

While U.S. investors naturally tend to focus on domestic markets, Fila, and thus Acushnet, is a global golf player. Analysts estimate Titleist owns more than 50% of the golf ball market and half the sport's footwear market, but has less exposure to equipment like golf clubs, so the weakness club maker Callaway Golf (NYSE:ELY) is experiencing makes it less of a problem for Fila's affiliate.

Stuck in a sand trap
But golf is in the bunker around the world. In Japan, for example, participation is down about 40% from its 1990s peak. In the U.S., course closures have averaged about 130 annually for the past eight years, and the National Golf Foundation said 400,000 golfers left the game in 2013.

Others offer an even more dire outlook. The industry watchers at consulting firm Pellucid said 1.1 million players left the sport in 2013, while the game's ranks have shrunk by nearly a quarter since its peak in 2002.

While there is growing interest in golf in China, investors would be wise to not place much stock in the nation being the industry's salvation. The Wall Street Journal last year reported the number of 18-hole golf courses in China had grown to about 1,000 over the past decade (though it's technically still illegal to build any there), and the ban on golfing Chairman Mao imposed decades ago is no longer in place, but the game is still officially considered the "sport of millionaires," in the words of Mao, which tends to highlight the growing wealth gap in the country and thus a potential target for retribution. 

Acushnet is a strong brand in the golf industry, and its IPO is expected sometime next year. But unless the industry reverses course here and elsewhere around the world, investors might ask for a mulligan on this offering.