Callaway Golf Company will file with the SEC a registration statement on Form S-4, which will include the proxy statement of Callaway Golf Company that also constitutes a prospectus of Callaway Golf Company and a consent solicitation statement of Topgolf International, Inc. (the proxy statement/prospectus/consent solicitation). Topgolf generated approximately $1.1 billion in revenue in 2019 and has grown at a 30% compound annual rate since 2017. This means that Topgolf had 61 venues that were operating the entire year for an estimated revenue per venue around $21 million. It was a Tuesday and it was packed, Whan remembers. Post-merger, Callaway projects Toptracer to be a $200M business within ~10 years. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. Surely that should humble us a bit?, Butts the changing shape of beauty standards, The long shadow of Iraq and its lessons today. Its whether the locations they are building are consistent so that there is a reason for people to come back more than once.. The replay may be accessed through the Internet at this link. While the eye-popping success of Topgolf has pleasantly surprised industry insiders and provided the sport with a jolt of innovation, just how much can Topgolfs massive draw help the golf business? WebTopGolf has 5 employees across 7 locations and $423.88 m in total funding,. Callaway is a leader in the global golf equipment market with a scale position in active-lifestyle soft goods and a proven ability to deliver strong returns, including company growth that has exceeded golf market growth for seven consecutive years. WebAbout Topgolf Entertainment Group Topgolf Entertainment Group is a technology-enabled global sports and entertainment community that connects people in meaningful ways In the next 10 years, we think that we can double the size of the business and add another 8,000 bays, said Topgolf CEO Dolf Berle. There is a lot of white space. 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. Callaway, Topgolf, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Callaway in connection with the proposed transaction. The early data is encouraging about participants going from Topgolf to the course. 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. https://www.ft.com/content/a3573b9e-dca8-11e5-8541-00fb33bdf038 Upgrade your subscription to get all the news you need: Adding SBJ weekly content will give you the comprehensive view of sports business with: Adding SBJ daily content will give you the comprehensive view of sports business with: Topgolfs future will be based on its ability to continue to scale and attract repeat visitors. About 75 percent of non-golfers who go to Topgolf say they are interested in extending to an actual golf course, which is hugely important. 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. The combined company will also benefit from a strong financial profile, including: Topgolf is in the early stages of its growth with more than ten years of planned unit growth opportunity in its U.S. venues business and just 2% addressable market penetration in international venues and 1% in the Toptracer Range business. (1) In 2020, amounts represent certain non-recurring costs, including costs associated with the Company's transition to its new North America Distribution Center and the implementation of new IT systems for Jack Wolfskin, as well as $0.7 million of severance related to the Company's cost reduction initiatives. Callaway's transition to a golf entertainment company provides opportunity for a higher valuation range. Chip Brewer will continue to lead the combined company as President and Chief Executive Officer. Callaway will assume Topgolfs net debt, which is estimated to be $555 million at closing7, resulting in an estimated enterprise value for Topgolf of approximately $2.5 billion. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The acquisition of Topgolf for $2.6 billion redefined Callaway (ELY) as a golf entertainment company. It starts with the fact that the millennial audience is largely focused on experiences, Horne said. Topgolfs venue revenue has now rebounded to about 85% of pre-pandemic levels and all of the companys locations have reopened. During the course of the preparation of the Company's consolidated financial statements and related notes as of and for the three months ended September 30, 2020, the Company and its auditors may identify items that would require the Company to make material adjustments to the preliminary estimates presented above. This includes favorable trends in rounds played and growth in beginning and returning golfers as well as broader consumer preferences for outdoor activities.2,3The combined company will have a highly diversified revenue mix, including Golf Equipment, 30%; Topgolf, 46%; and Softgoods, 24%4. 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 Capital is also needed to support the companys strategy to offer broader entertainment products either through acquisition or development. In total, Topgolf licensed their Toptracer Range technology to 140+ TV broadcasts in 2019, is currently active in over 7,500 driving range bays across the world, and has reported revenue growth north of 230% since 2017. Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel. The company asked the city for $2.6 million in (760) 931-1771 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. https://www.sportsbusinessjournal.com/Journal/Issues/2018/04/02/In-Depth/Topgolf.aspx. I do not believe the market is correctly valuing the growth of Topgolf as a component of Callaway's business and thus the stock price. The connective PGA of America efforts include Topgolf holding sponsorship and media events, and other fan engagement efforts tied to PGA of America events along with Topgolf promoting the PGA Junior League Golf program. 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. Give them a try - use JOE25 for 25% off your first order at athleticbrewing.com. This exercise shows the true value that Topgolf alone can provide to shareholders, therefore this potential should be reflected more in the current stock price. Callaway projects the combined companys revenue will be $2.8 billion, based on fiscal year 2019 results. 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. Change the plan you will roll onto at any time during your trial by visiting the Settings & Account section. Any environment where individuals are swinging golf clubs is terrific, said Sarah Hirshland, senior managing director of business affairs for the USGA, which last year partnered with Topgolf to hold U.S. Open watch parties at all Topgolf venues. Non-recurring costs and non-cash charges, before taxes (1). As part of Callaway, we plan to grow our leadership position by leveraging Callaways brand reputation, industry relationships and financial strength to connect more communities around the world to the Topgolf experience.. More than two decades of archival stories, profiles, research and data. Therefore, adjusted revenue and EBITDA numbers for the full-year 2021 would be around $1.3 billion and $190 million. 3 Morning Consult Polling, Published July 21, 2020 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. Call 1-800-GAMBLER (NJ/WV/PA/IL) or 1-800-9-WITH-IT (IN only) or 1-800-BETS-OFF (IA only) or 1-800-522-4700 (CO Only) or TN REDLINE: 800-889-9789. Webguidance to $424 to $430 million as golf equipment and apparel revenue and Topgolf venue profitability continue to outperform prior expectations Earnings Per Share - diluted $0.14 $0.61 $(0.47) $1.01 $0.99 $0.02 one additional planned location expected to open in the fourth quarter of 2021 We value who they reach and their diversity.. 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. Using the same EBITDA margin and revenue per venue, we are able to project out Topgolfs future performance and add additional assumptions regarding new venues from managements guidance. 2023 Leaders Group. 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. 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. Callaway also will assume Topgolfs debt, which is estimated to be $555 million at closing. See more in GNN's affiliate disclosure. However, the Company has not completed its financial closing procedures for the three months ended September 30, 2020, and its actual results could vary materially from these preliminary estimates. I am incredibly bullish on it, said Jeff Price, chief commercial officer for the PGA of America. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Leaders Group. Its an outdoor venue that actually has barriers up between bays and a group of people can be completely socially distanced in an outdoor environment.. Upon closing, the combined companys Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. Whats the bid for this rarest of Bugattis? The high degree of interest in the game of golf as well as the past and future growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. His family bootstrapped their business from their basement to an $8 billion acquisition, turning down $500M cash in the process. I am currently a senior at Bentley University majoring in Finance and Entrepreneurship. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. CARLSBAD, CA and DALLAS, TX October 27, 2020 Callaway (NYSE:ELY) and Topgolf Entertainment Group (Topgolf) today announced that the companies have entered into a definitive merger agreement. Topgolf was generating $1.1 billion in revenue pre-pandemic at 63 locations that drew more than 23 million customers in 2019. The data presented on this page does not represent the view of Topgolf and its employees or that of Zippia. Topgolf began looking at an initial public offering in 2019. Already a subscriber? This suggests that based on the current industry multiples and Topgolfs performance coming out of COVID, Callaway did not drastically overpay in the merger when you look towards the higher range of the valuation. The challenge is balancing Topgolfs position as a young, hip, social scene geared to drinking, eating and meeting people with the golf groups interest in growing the game. If you would like to participate in the call, please dial 1-877-879-1183 or 1-412-902-6703, if calling internationally, approximately 15 minutes prior to the start of the call (access code: 5543896). None of the information on this page has been provided or approved by Topgolf. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. 2023 Leaders Group. 4 Based on 2022 projections Topgolf now has 38 U.S. and three overseas venues where customers can hit chip-embedded balls at high-tech driving range targets in a lounge-like atmosphere, complete with DJs and drink specials. 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., In addition to Callaway, the current Topgolf ownership includes Providence Equity Partners, WestRiver Group and Dundon Capital Partners, which added: This is a natural combination that brings together two complementary businesses at the center of one of the most dynamic sports and entertainment experiences available today. I am not receiving compensation for it (other than from Seeking Alpha). Topgolf Entertainment Group's platforms include Topgolf venues, Topgolf International, Toptracer, Topgolf Media and Topgolf Swing Suite. Diluted earnings (loss) per share:. (1) Represents amortization expense of intangible assets from the acquisitions of OGIO, TravisMathew and Jack Wolfskin. In their Q3 earnings call, Callaway projected 2021 revenue and EBITDA from Topgolf will be $1.06 billion and $158 million; this provides an EBITDA margin of 14.91%. Please. Callaway undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. They need to be smart in how they reach and connect with those people.. Under the terms of the agreement, Callaway and Topgolf will combine in an all-stock transaction creating a global golf and entertainment leader. Topgolf is merging with Callaway in a deal valued at $2 billion You have 2 All Access articles remaining this month. Both CEOs said golf equipment and golf entertainment venues have a chance to excel in the COVID-19 environment while other forms of entertainment have been severely restricted. Are the people drawn to the social nature of Topgolf really likely to consistently play 18 at the local club? You have to continue to reinvest in the experience.. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. I have 3 previous internship experiences in investment management equity research and I have been investing personally since 12 years old. He has been CEO since 2011, and was instrumental in the Amway Center winning a Sports Business Award for Facility of the Year in 2012. After extensive research and analysis, Zippia's data science team found the following key financial metrics. During today's conversation IEG's Vice President of Strategy and Churchill Downs Vice President of Marketing, Brand and Partnerships Casey Ramage give us some insight on their analytical approach to sponsorship strategy. In addition, investors and stockholders will be able to obtain free copies of the proxy statement/prospectus/consent solicitation and other documents filed with the SEC on Callaways website at https://www.callawaygolf.com (for documents filed with the SEC by Callaway). Information regarding Callaways directors and executive officers is contained in Callaways Annual Report on Form 10-K for the year ended December 31, 2019 and its Revised Definitive Proxy Statement on Schedule 14A, dated March 27, 2020, which are filed with the SEC and can be obtained free of charge from the sources indicated above. cookies Callaway announced the deal along with its third-quarter financial results, noting 12% year-over-year revenue growth to $476 million. The company has a proven ability to innovate to expand its addressable market and capture the potential of games and content on its interconnected platform. 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. Topgolfs ball-tracing technology is seen on televised golf broadcasts and its mobile golf game, World Golf Tour, boasts 28 million members. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. Dont sacrifice your ability to be healthy, active, and at your best to enjoy a great beer - Athletic Brewing has created an innovative lineup of refreshing, non-alcoholic craft beers. WebTopgolf: An entertainment complex that provides competitive golfing games for individuals and groups of all ages and skill levels. Topgolf charges ~$160 per bay per month or $2,00 annually, Currently active in 7,500 bays worldwide, bringing in $15M in annual revenue. 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. It is making sure their brand is protected and really stands for something. We support credit card, debit card and PayPal payments. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. 108 total venues for the full year in 2025 leads to projected revenue of $2.3 billion and $336 million of EBITDA. I never would have envisioned that it has become as popular as it is.. I am not receiving compensation for it (other than from Seeking Alpha). Topgolf is doing some interesting things and is having an impact, said Scott Seymour, senior vice president and managing director of Octagons golf business. 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