Timely, daily updates provide the latest developments and news relied upon by industry leaders. Dallas-based Topgolf Entertainment Group is merging with publicly traded golf brand Callaway in an all-stock transaction that values the golf entertainment business at $2 billion. The deal is expected to close in early 2021. Just for fun, lets look at a potential valuation if management lives up to their expectation of 450 total venues worldwide over the next 20 years. Callaway's transition to a golf entertainment company provides opportunity for a higher valuation range. Topgolf is merging with Callaway in a deal valued at $2 billion Fueled by a tremendous team of associates and a diverse offering across our venues, Toptracer, and media platform, Topgolf is truly changing the landscape of the industry by making golf more inclusive and accessible to people of all ages, demographics and skill levels. After extensive research and analysis, Zippia's data science team found the following key financial metrics. It was a Tuesday and it was packed, Whan remembers. Martins is a long-time sports executive who first started with the Magic in 1989. Morgan Stanley & Co. LLC and J.P. Morgan served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to Topgolf. While golf has struggled in recent years with courses closing across the country, the pandemic has actually been a boon as more corporate employees work from home, along with the outdoor atmosphere golfing provides. Please. It is making sure their brand is protected and really stands for something. Upon completion of the merger, Callaway shareholders will own approximately 51.5% and Topgolf shareholders (excluding Callaway) will own approximately 48.5% of the combined company on a fully diluted basis. Callaway Golf Company (NYSE: ELY) is a premium golf equipment and active lifestyle company with a portfolio of global brands, including Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin. Other lead investors include Callaway, which took a stake in the company in 2006; Carolina Hurricanes owner Thomas Dundon, who bought a stake in 2011; and Providence Equity, which took an undisclosed stake in 2016. Dolf Berle will continue to lead the Topgolf business through a transition period following the close of the transaction, at which time he intends to step down to pursue other leadership opportunities. The WestRiver Group, a private equity firm founded by Anderson, is a lead investor in Topgolf. Callaway Preliminary Q3 Results and Business Update, Chip Brewer added: The world is rediscovering golf in a way that has led to a record quarter for our company. Itll be fun to see how creative Callaway gets in an attempt to funnel recreational driving range visitors into legitimate customers for their existing brand. In that time, Topgolfs value grew to equal that of Callaway, a dominant name in golf equipment and apparel. The replay may be accessed through the Internet at this link. Even with the dizzying ascent of the company, Topgolf faces challenges with its growth and expansion. 1 Golf Datatech industry report published September 21, 2020 Keep in mind that this is all in-addition to Callaways core golf products business which will only see greater demand as well as a result of Topgolfs influence worldwide. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. See more in GNN's affiliate disclosure. Stay informed and spot emerging risks and opportunities with independent global reporting, expert The deal ends a 20-year journey as a private company for Topgolf, a concept that started in the United Kingdom to create a new experience in a golf game thats struggled in recent years. We dont rule it out, Anderson said of the possibility of going public. Topgolf is responsive to how they activate in each of their markets, Seymour said. Attention spans scatter. INVESTORS AND STOCKHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS/ CONSENT SOLICITATION, AND OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLAWAY GOLF COMPANY, TOPGOLF INTERNATIONAL, INC., THE PROPOSED TRANSACTION AND RELATED MATTERS. We value who they reach and their diversity.. The non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. City Council voted 4-3 to allocate the remaining $6 million in STAR bond revenue to the Topgolf project. Revenue at golf courses and clubs improved from $29.9 billion in 2011 to Through $750 million in acquisitions of premium apparel, footwear, and equipment brands like Jack Wolfskin, TravisMathew and Ogio, Callaway has desperately attempted to diversify their business and cater to a younger demographic which seems to be losing interest in golf or never picked it up in the first place. Gambling problem? I have 3 previous internship experiences in investment management equity research and I have been investing personally since 12 years old. The Company provides information about its results excluding interest, taxes, depreciation and amortization expense, and non-cash stock compensation expense. This communication is for information purposes only and is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. Topgolf may also be known as or be related to TopGolf International, Inc., Topgolf, Topgolf Entertainment Group, Topgolf International, Topgolf International Inc and Topgolf International, Inc. Stars and Strikes Family Entertainment Centers, Stars and Strikes Family Entertainment Centers Revenue, Stars and Strikes Family Entertainment Centers Reviews, Stars and Strikes Family Entertainment Centers Careers, Private Equity Round - Topgolf Entertainment Group. Topgolf began looking at an initial public offering in 2019. Is this happening to you frequently? For additional information concerning these and other risks and uncertainties that could affect these statements, the golf industry, and Callaways business, see Callaways Annual Report on Form 10-K for the year ended December 31, 2019 as well as other risks and uncertainties detailed from time to time in Callaways reports on Forms 10-Q and 8-K subsequently filed with the SEC, including the proxy statement/prospectus/consent solicitation that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed transaction. or According to Axios, 1834 year olds represent 25% of on-course golfers, but 40% of the 9.9 million off-course golfers (i.e. John Lundgren will continue as Chairman of the Board of the combined company, while Erik Anderson will serve as Vice Chairman. GNN may earn a commission from sales generated by those links. Along with the announcement, Callaway released a 30-page presentation giving rare insight into Topgolfs existing ownership structure, financials, and projections. Young people are fickle. 6 Implied equity value of $1.739 billion when accounting for the various preferential rights of Topgolf shareholders and excluding assumed stock options and Callaways ownership position Kara Barry Founded in 2000, Topgolf has reinvented the concept of golfs antiquated driving range to attract both golf aficionados and novices alike, turning it into a destination venue for people to play technology-enabled golf games accompanied by music, food, and drinks. Topgolf generated approximately $1.1 billion in revenue in 2019 and has grown at a 30% compound annual rate since 2017. Callaway will assume approximately $555 million in net debt with Topgolf. Topgolf is continuing on its expansion plans in major American cities, as well expanding into Australia, Mexico and Canada through licensing deals. The data on this page is also based on data sources collected from public and open data sources on the Internet and other locations, as well as proprietary data we licensed from other companies. Measure of Success: Churchill Downs Race Tracks Sponsorship Strategy Sponsored by IEG, The Marchand and Ourand Sports Media Podcast: Episode 69, NFL still a ratings powerhouse, but there's room to improve for ESPN and Amazon, Fischer: Big questions remain following Hamlin injury, but NFL teams 'absolutely' expect to play on Sunday. A recent survey conducted for Topgolf by the National Golf Foundation shows that 23 percent of new golfers started playing after their first Topgolf experience, while 75 percent of non-golfers said they were interested in playing on a traditional course after playing Topgolf. personalising content and ads, providing social media features and to People come back, it is a meaningful repeat business, he said. Topgolf states that about 51 percent of its customers are non-golfers who wind up swinging a club for the first time with their friends at a Topgolf venue, a statistic that has industry insiders brimming with optimism that the company can attract new and younger fans and players to the game, which skews to an older demographic. Upon arriving, he was immediately taken aback. Callaway first invested in Topgolf in 2006, and the companies have maintained a strong partnership since, including an exclusive golf partnership agreement at all Topgolf venues. After the merger, Callaway said its golf equipment will account for 30% of revenue and its apparel 24%, while Topgolf will represent 46% of revenue. After extensive research and analysis, Zippia's data science team found the following key financial metrics. Maintaining our same EBITDA multiple range of 8.20x to 12.75x, the Topgolf business could be worth up to $4.3 billion in total value and $23.02 per share by 2025. On Tuesday, Callaway announced a definitive merger agreement which would see the Golf giant digest the remaining 86% of Topgolf they didnt already own at a ~$2 billion valuation. As Topgolf continues to expand, all eyes will be on whether Topgolf can play a major role in developing a new generation of golfers and enthusiasts of the game. At Topgolf, you pay for time at a bay, which you should typically reserve well in advance of your visit if it's a weekend. 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While we have made attempts to ensure that the information displayed are correct, Zippia is not responsible for any errors or omissions or for the results obtained from the use of this information. Topgolf, in addition to tapping into golf as a property, has seen their growth based in providing great experiences both in their venues and outside.. In addition, these preliminary estimates are not necessarily indicative of the results to be achieved in any future period. I am currently a senior at Bentley University majoring in Finance and Entrepreneurship. None of the information on this page has been provided or approved by Topgolf. A long-term forecast of each of these line items is not available without unreasonable efforts due to the variability of these items and the inability to predict them with certainty. And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. Topgolf venues overall averaged more than 35,000 customer visits per day last year, with the average customer spending two hours per visit at a venue, according Topgolf is expected to generate $1.06 billion in revenue and $158 million in EBITDA in 2021. In the past year, Topgolf has pushed to broaden its footprint with a steady diet of new venues and products marketed outside of its driving range/entertainment venues (see related story). At Athletic Brewing, they're all about re-imagining beer for the modern adult. Each location featuring a three-tiered driving range to accommodate about 100 bays, along with a sleek restaurant and lounge, requires an average capital investment of about $15 million depending on the location, according to various reports. Whats the bid for this rarest of Bugattis? The number of shares to be issued is based upon an implied equity value of Topgolf of approximately $2 billion, including the 14% already owned by Callaway. Callaway also will assume Topgolfs debt, which is estimated to be $555 million at closing. Looking for a great beer for Sunday through Thursday nights? The words may, should, will, could, would, anticipate, plan, believe, project, estimate, expect, strategy, future, likely, and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made and are not guarantees of future performance. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. Through an unwavering commitment to innovation, Callaway manufactures and sells premium golf clubs, golf balls, golf and lifestyle bags, golf and lifestyle apparel and other accessories. Based on industry valuations and the anticipated growth in venues, I believe the Topgolf business alone will be worth at least $4.3 billion by 2025. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. Remaining privately-owned during those two decades, the company built locations in every region of the country. For a full comparison of Standard and Premium Digital, click here. Therefore, adjusted revenue and EBITDA numbers for the full-year 2021 would be around $1.3 billion and $190 million. The Callaway golf business, and the game of golf itself is experiencing unprecedented growth, Brewer said. Subscribe to receive our press releases via email: Topgolf Kicking Off 2023 with Opening of Charleston Venue, Pro forma revenue of approximately $2.8 billion based on fiscal year 2019 results that is expected to grow to approximately $3.2 billion by 2022 and at approximately 10% per year in the years following, Pro forma adjusted EBITDAS of $270 million based on fiscal year 2019 results that is expected to grow to approximately $360 million by 2022 and at mid-to-high teens per year in the years following. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. Anderson would not disclose any company financial information or the cost of building Topgolf venues, but building between seven and 10 new venues annually would require a hefty dose of capital. 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