Daily Business Report-Jan. 12, 2017
Ely Callaway moved the company to Carlsbad in 1983. (Callaway Golf Company)
Callaway Golf Company Acquires
OGIO International for $75.5 Million
Carlsbad-based Callaway Golf Company, the world’s largest maker of golf clubs, has acquired OGIO International Inc., manufacturer of golf bags, backpacks and other sports accessories, for $75.5 million in cash.
OGIO, based in Draper, Utah, is expected to generate $45 million in revenue in 2017, Callaway said in its announcement.
The acquisition enhances Callaway’s presence in golf while also providing a platform for future growth in the lifestyle category, the company said.
“We are excited about OGIO becoming part of Callaway and believe this acquisition aligns well with our stated goal of strategically developing growth in tangential areas,” said Chip Brewer, president and CEO. “There is a robust strategic fit between the companies; both are strong brands with a sports heritage that share a passion for creating high-quality, performance-driven products. There is also significant overlap in our supply chains and go-to-market strategies, which should allow us to add value and create profitable growth.”
Callaway said intends to finance the transaction with cash on hand and borrowings from its existing asset-backed credit facilities. Latham & Watkins LLP acted as legal counsel and Lazard acted as financial adviser to Callaway. Snell & Wilmer LLP acted as legal counsel and Robert W. Baird & Co. acted as financial adviser to OGIO.
Callaway Golf Company was founded by former Burlington Industries president Ely Callaway Jr., who in the early years sold golf clubs out of his Cadillac. In 2013, Callaway Tour Staff professional Phil Mickelson won the U.S. Open Championship.
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SDSU to Share $28 Million in Funding
To Explore Future of Transportation
The U.S. Department of Transportation has awarded a five-year grant totaling $28 million to San Diego State University and two other universities
to study how the changing American driving landscape will impact driver and pedestrian safety.
“One of the challenges that future transportation engineers face is finding ways to promote safety when a vast amount of data is generated from an ever-growing number of smart devices that connect vehicles, humans, and infrastructure,” said Morteza Monte Mehrabadi, dean of SDSU’s College of Engineering.
To address the challenges, the Department of Transportation will provide the funding to SDSU, Virginia Tech and Texas A&M University. With matching funds from universities, state and privae sources, total funding comes to $28 million.
Congresswoman Susan Davis (D-San Diego), whose district includes SDSU, said the funding “demonstrates the leadership role San Diego State plays when it comes to research and innovation. The San Diego region is no stranger to the transportation challenges facing the country. The research done at SDSU will help us meet those challenges and develop the leaders in transportation to take us into the future.”
“We were chosen to be part of this collaboration because of SDSU’s experience in vehicle safety and human factors research, as well as work zone and signaling safety,” said Sahar Ghanipoor Machiani, assistant professor of transportation engineering in the Department of Civil, Construction, and Environmental Engineering. “And we also provide a West Coast perspective to a field of work that has traditionally been done by East Coast institutions.”
Read the SDSU NewsCenter report
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Convention Center Forecast: $1.1 Billion
Impact from Record Medical Meetings
The San Diego Convention Center Corporation is forecasting a record-breaking calendar year in 2017 for medical meetings.
A total of 21 medical events, including BIO 2017, the American Academy of Orthopaedic Surgeons and the American Association of Diabetes, will hold their annual events in San Diego over the next 12 months: that’s the highest number of medical meetings ever in a calendar year.
The economic benefits from the medical meetings alone are estimated to account for 53 percent of the convention center’s estimated $1.1 billion in regional impact that will be generated between January and December of 2017.
The forecasted attendance of 219,275 for 2017 medical meetings is more than the populations of the cities of Escondido and Encinitas combined.
“The upcoming year will be one of our strongest ever for medical meetings,” said Clifford “Rip” Rippetoe, president and CEO. “Medical meetings are key to San Diego’s success as a premiere meeting and convention destination. Our region is a hotspot for research, education and the biotech industry. In calendar year 2017, medical meetings account for 27 percent of total attendance and 53 percent of our regional impact.”
A total of 62 citywide conventions will take place this calendar year. The city of San Diego benefits from each event because the hotel and sales tax revenue that results form these conventions goes directly to the city’s general fund. In 2017, that number will be an estimated $24.4 million. Convention attendees are projected to generate approximately $653.5 million in direct attendee spending. Currently, center events are projected to account for 769,282 hotel room nights in 2017.
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New Study: California Debt Now
Running Closer To Italy and Portugal
A landmark study of California’s finances reveals the state’s debt burden is approaching the levels of Italy and Portugal, where debt crises in 2011 and 2012 drove the Eurozone countries to the brink of collapse. The findings come a day after Governor Jerry Brown predicted that the state would end the year with a sizable deficit.
California Policy Center researchers Marc Joffe and Bill Fletcher determined that California state and local governments owed $1.3 trillion as of June 30, 2015. Their analysis is based on a review of federal, state and local financial disclosures. The total includes bonds, loans and other debt instruments as well as unfunded pension and other post-employment benefits promised to public sector employees.
“Our estimate of California government debt represents about 52% of California’s Gross State Product of $2.48 trillion. When added to the state’s share of the national debt, we find that California taxpayers are shouldering debt burdens on a par with residents of peripheral Eurozone states,” they write.
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Qualcomm Ranked 4th in New
Patents in 2016, Beating Google
San Diego-based Qualcomm ranked 4th among all companies in patents issued last year, beating Internet powerhouse Google, in a widely-followed annual ranking.
IBM ranked first first with 7,355, followed by Samsung with 5,072, Canon with 4,134, Qualcomm with 2,900 and Google with 2,835. Qualcomm was the only San Diego company in the top 50.
The ranking was released late last week by Connecticut-based IFI Claims Patent Services, which analyzes U.S. Patent and Trademark Office data
each year to count the number of “utility patents” issued to private companies. Utility patents cover the invention of a new process or device or a significant improvement.
The calendar year 2016 saw 304,126 utility patents, the most issued in a single year, according to IFI CLAIMS.
American companies hold 41 percent of those patents followed by Japan at 28 percent, South Korea at 15 percent, Taiwan at 4 percent, Germany at 2.6 percent and China at 2.5 percent.
“Although it was a bit of a down year for Japan, Asia as a whole continues to make impressive gains with U.S. patents,” said Mike Baycroft, CEO of IFI CLAIMS. “American tech companies are similarly motivated but it will be interesting to see how this path plays out in five or ten years. At this rate, South Korea, China and Taiwan will likely capture an even larger share of the U.S. patent market.”
IFI CLAIMS is the nation’s oldest patent analysis firm.
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Supervisors Approve Adding
82 Acres to Hellhole Canyon
The San Diego County Board of Supervisors voted to buy 82 acres of land to add to, and help protect, existing and sensitive habitat in Hellhole Canyon County Preserve in Valley Center Wednesday.
The 82 acres, located east of North Lake Wohlford Road at the northern end of Sunset Vista Lane, includes sensitive chaparral and coastal sage scrub habitat that will add to the 1900-acre preserve.
Supervisors voted to buy the land for $1.1 million, with the help of a $50,000 donation from the Friends of Hellhole Canyon.
The new land will give sensitive plants and animals large blocks of land where they can thrive. Chaparral and coastal sage scrub are important habitat areas for many of the region’s sensitive species — from plants like San Diego thornmint, sticky dudleya and slender pod jewelflower; to birds and animals including Cooper’s hawks, golden eagles, pallid bats, San Diego horned lizards and San Diego banded geckos.
Hellhole Canyon Preserve includes 13 ½ miles of moderate-to-advanced trails for visitors. It also has an area where horseback riders can park trailers, as well as restroom, potable water, a lookout point and an amphitheater. The preserve’s trails run through creek areas with large sycamore and oak trees to sage and California lilac covered chaparral areas up to Rodriguez Mountain, where visitors can see all the way to the ocean on clear days.
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Personnel Announcements
Mary Long Appointed Managing Director
Of USD Supply Chain Management Institute
Mary Long has been appointed managing director of the Supply Chain Management Institute (SCMI) in the University of San Diego School of Business. Formerly vice president of logistics and network planning with Domino’s Pizza, Long succeeds Joel Sutherland who assumed leadership of the SCMI in 2011.
Long’s areas of expertise include logistics, supply chain strategy and systems, engineering, manufacturing, global equipment and supply, customer collaboration and operations.
Long is currently incoming chair for the Council of Supply Chain Management Board of Directors and also serves on the advisory board for AWESOME (Achieving Women’s Excellence in Supply Chain, Operations, Management and Education).
She holds an MBA in operations and logistics from The Ohio State University and an undergraduate degree in quantitative business analysis from Cleveland State University. Her career includes 15 different supply chain roles for Campbell Soup, General Mills, Pillsbury and Quaker Oats/Gatorade, among others, and spans 10 different cities in eight different states. Long has also worked in manufacturing operations and food distribution.
