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Callaway and Topgolf sign merger agreement

In one of the biggest acquisitions in golf industry history, Callaway and Topgolf Entertainment Group today entered into a definitive merger agreement. Under the terms of the agreement, Callaway and Topgolf will combine in an all-stock transaction creating a global golf and entertainment company.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.

The number of shares issued is also based upon a fixed price of Callaway common stock of $19.40 per share. Callaway will assume Topgolf’s net debt, which is estimated to be $555 million, resulting in an estimated enterprise value for Topgolf of approximately $2.5 billion. Callaway Golf President and CEO Chip Brewer will lead the combined company.

Before the national Covid-19 lockdown of this past spring, Topgolf had been actively seeking an IPO that had Wall Street valuing the Dallas-based company as high as $5 billion.

The merger is another step that takes Callaway Golf, which first invested in Topgolf in 2006, away from its core golf business and makes it a more diverse company, including the Jack Wolfskin and Travis Mathew apparel brands and luggage brand, Ogio.

Topgolf, a privately held company, says it generated approximately $1.1 billion in revenue in 2019 and has grown at a 30 percent compound annual rate since 2017.

 

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