Goldman, Sachs Bowling For Dollars With Talks to Acquire AMF
DAVID E. KALISH
Jan. 05, 1996
NEW YORK (AP) _ Move over, Ralph Kramden: The pinstripe-and-wingtip crowd at Goldman, Sachs & Co. wants to join the bowling leagues.
The Wall Street investment bank was in talks Friday to buy AMF Corp., the nation's biggest owner of bowling alleys and bowling equipment manufacturer, sources close to the negotiations said. AMF could fetch as much as $1 billion, the sources said, speaking on condition of anonymity.
At first glance, such a deal seems an improbable investment for an elite firm more closely associated with wealthy financial traders than blue-collar alley dwellers. Yet Goldman's pursuit of profits in the $4 billion U.S. bowling industry is spurred by a trend toward more upscale bowlers, analysts said.
A spokesman for Goldman Sachs said the privately held firm had no comment on any talks with AMF, which were first reported in The New York Times.
For years, bowling in the United States has been a mainstay of primarily blue-collar leagues that made it tough for individuals to get a lane on some nights.
But in the past decade, increased real estate costs and more harried U.S. lifestyles have eroded the bowling business. The number of bowling centers has fallen to about 6,200, from 7,600 10 years ago, said Sandy Hansell of Sandy Hansell & Associates, a consultant and broker for the bowling center industry based in Southfield, Mich.
To try to capture a higher-income crowd, AMF and other bowling companies are including, alongside alleys, video arcades, carousels and other family activities.
``The industry is poised for growth because it's repositioning itself,'' Hansell said.
Goldman also is part of a continuing trend by brokerage firms to expand beyond their mainstream businesses into companies that seem to have potential for strong profits. In addition to Goldman, big players in the business of taking stakes in other firms, known as merchant banking, include Morgan Stanley & Co.; Donaldson, Lufkin & Jenrette; Lehman Brothers Inc. and CS First Boston.
Analysts said AMF is attractive because it is positioned to benefit from an expected consolidation of a fragmented industry poised for a rebound. AMF has 207 bowling centers in the United States and 70 overseas, including some that have expanded into other entertainment activities.
The company had been acquired in 1986 for $225 million by a group of investors led by William Goodwin Jr. of Richmond, Va., from Minstar Inc., the boat and sporting goods maker controlled by Irwin Jacobs.
Goodwin, who is chairman of CCA Industries, approached Goldman seeking its advice on a potential sale of the group's AMF bowling subsidiaries in an initial public offering. But Goldman decided after reviewing the business to buy the company itself, the sources confirmed.
A secretary at CCA headquarters said that no one was available to comment on the reported deal.