- Golf equipment company Callaway Golf Co (NYSE: ELY) announced this week that it is merging with Topgolf in a deal valued at nearly $2 billion. These are the details.
Golf equipment company Callaway Golf Co (NYSE: ELY) announced this week that it is merging with Topgolf. Topgolf is a company that combines technology, sports, and entertainment across 58 locations across America.
“Together, Callaway and Topgolf create an unrivaled golf and entertainment business,” said Callaway CEO and president Chip Brewer. “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.”
Brewer is going to run the combined company following the completion of the merger. Topgolf’s current CEO Dolf Berle is going to continue to lead Topgolf during the transitional period and then step down from the company. Topgolf will be joining Ogio, Travis Mathew, and Jack Wolfskin under the Callaway parent company.
Callaway already owned 14% of Topgolf following several investments, starting with the first round in 2006. The all-stock merger deal involves Callaway issuing approximately 90 million shares of its common stock to non-Callaway shareholders of Topgolf based upon an implied equity value of Topgolf at $1.986 billion.
On Tuesday evening during a conference call, Berle pointed out that all Topgolf venues in the US had reopened by early September.
And recent operating sales are back to 80-85% of 2019 same-location sales. Plus Berle noted that 33 new venues are in the planning stages and approximately 200 possible locations have been determined for Topgolf venues in the United States.
Not only does Topgolf own 58 locations in the United States, it also runs Toptracer. Toptracer is a technology solution used during TV broadcasts to enable viewers to follow balls as it flies through the air. Now that technology is being rolled out at driving ranges in the form of Toptracer Range, which allows golfers to see the ball flight as they practice on screens, smartphones, and tablets.
There were 23 million visits to Topgolf venues in 2019. And 51% of the people who went to a Topgolf facility last year were non-golfers. And 75% of those people said that after visiting a Topgolf venue, they became interested in playing golf on a course.
The merger deal is expected to be finalized in early 2021.
