Callaway, Topgolf to Combine, Creating Global Golf, Entertainment Leader

Oct 29, 2020 10:54AM By David Dykes

Callaway (NYSE: ELY) and Topgolf Entertainment Group announced the companies have entered into a definitive merger agreement that calls for Callaway and Topgolf to combine in an all-stock transaction.  

The number of shares to be issued is based upon an implied equity value of Topgolf of approximately $2 billion, including the 14 percent already owned by Callaway, officials with Callaway said.

Topgolf is a tech-enabled golf entertainment business, with a platform that comprises its open-air venues, Toptracer technology and media platform with a differentiated position in eSports.

It has locations in Greenville, Myrtle Beach and Charlotte, according to the company’s website.

Topgolf generated approximately $1.1 billion in revenue in 2019 and has grown at a 30 percent compound annual rate since 2017.

Callaway is a leader in the global golf equipment market with a scale position in active-lifestyle soft goods and company growth that has exceeded golf market growth for seven consecutive years.

"Together, Callaway and Topgolf create an unrivaled golf and entertainment business," said Chip Brewer, Callaway's president and chief executive officer. "This combination unites proven leaders with a shared passion for delivering exceptional golf experiences for all – from elite touring professionals to new and aspiring entrants to the game. 

“We've long seen the value in Topgolf and we are confident that together, we can create a larger, higher growth, technology-enabled global golf and entertainment leader. Callaway's strong financial profile will enable the combined company to accelerate innovation, develop exciting new products and experiences, and create compelling value for shareholders, while providing the dedicated teams of both companies more opportunities to showcase their talents and complementary capabilities."

"We are excited to join the Callaway family and strengthen the experiences we create at the intersection of sports and tech-driven entertainment," said Dolf Berle, Topgolf’s chief executive officer. "As part of Callaway, we plan to grow our leadership position by leveraging Callaway's brand reputation, industry relationships and financial strength to connect more communities around the world to the Topgolf experience."

Callaway first invested in Topgolf in 2006, and the companies have maintained a partnership since, including an exclusive golf agreement at all Topgolf venues. Topgolf has achieved rapid growth and strong customer engagement since its founding in 2000.

"All of us are looking forward to building new experiences, reaching new audiences and solidifying our digital infrastructure as we connect communities around the globe," said Erik Anderson, Topgolf's executive chairman.

In addition to Callaway, Topgolf ownership includes Providence Equity Partners, WestRiver Group and Dundon Capital Partners.