The equipment maker will take over the nightclub-themed operator of driving ranges and gain access to a different kind of golfer
Announced: By Callaway Golf, that the equipment manufacturer will acquire golf-entertainment company Topgolf in a deal valued at $2 billion. Callaway, which already had owned 14 percent of Topgolf, entered into a merger agreement for an all-stock transaction with the Dallas-based operator of nightclub-themed driving ranges. Topgolf generated about $1.1 billion in revenue at 63 locations in the U.S., Canada, the United Kingdom and Australia in 2019 and has grown at a 30-percent rate annually since 2017, the companies reported. Callaway, based in Carlsbad, Calif., generated nearly $2.8 billion in revenue last year and trades under the symbol ELY on the New York Stock Exchange. Callaway makes clubs such as the Big Bertha line, plus balls and soft goods. Chip Brewer, Callaway’s chief executive officer, will run the combined companies. The deal’s appeal for Callaway is to gain access to a younger demographic of Topgolf customers who don’t necessarily identify themselves as golfers. In 2019, Topgolf served 23 million customers, more than half of whom described themselves as non-golfers. “Together, Callaway and Topgolf create an unrivaled golf and entertainment business,” Brewer said in a statement. “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.” Topgolf reportedly has rebounded to about 85 percent of its business level before the global coronavirus pandemic, and the company expects to double its size by the end of the decade. “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,” Topgolf CEO Dolf Berle said in a prepared statement. Berle reportedly will remain at Topgolf through a transition period after the deal closes.
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