TearDrop Merger

TearDrop Golf are to merge with a privately held Toronto company called Gen-X Sports in a deal that will bring much-needed financial help to the troubled Illinois equipment maker which also owns the Ram Golf and Tommy Armour brands.

The proposed transaction provides for Gen-X, which sells snowboards, skateboards and scooters under the Oxygen brand name, to receive 160 million shares of TearDrop stock and to contribute $10 million of additional funding to the combined companies.

TearDrop president and chief operating officer Andrew Kairey said there was not much he could say as the deal was still being put together and would eventually need to be reviewed by the Securities and Exchange Commission and approved by TearDrop shareholders.

A name for the new company has not been determined, he stated, and neither his, nor chief executive officer Rudy Slucker's, roles in the future entity have been determined. But Kairey seems confident that TearDrop, Tommy Armour and Ram golf products will continue to be manufactured and sold by the combined business when the deal is done.

Executives of Gen-X Sports, which was formed in 1991 and also operates in the field of branded excess inventory for sporting goods suppliers, would not comment on the merger. Some industry watchers have characterised the transaction as a "firesale" in which Gen-X is getting the vast majority of the company in exchange for $10 million. Others have speculated that the primary motivation for the Canadian concern, which also has offices in California and Switzerland, is to use this merger as a way to go public on an American stock exchange.