The transaction is subject to the approval of the shareholders of both Callaway and Topgolf, as well as other customary closing conditions, including required regulatory approval. The number of shares issued is based upon an implied equity value of Topgolf of $1.986 billion6(including Callaways ownership position). 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. invrelations@callawaygolf.com, For Topgolf: Last year, Topgolf had a massive 13 million customer visits and that number is expected to continue growing rapidly through an aggressive expansion strategy that includes plans to open between seven and 10 new venues annually for the foreseeable future both in the U.S. and overseas. Due to the constant popularity of Topgolf venues as well as the sport, I believe locations will continue to report exceptional revenues. The proposed expansion of the non-essential goods tax, which would see luxury good items taxed more, would generate st least P12.4 billion in annual revenue 3 Morning Consult Polling, Published July 21, 2020 In addition, the Company's independent registered public accounting firm has not audited this information or completed its quarterly review procedures for the quarter ended September 30, 2020 and does not express an opinion or any other form of assurance with respect to these preliminary estimates or their achievability. Before that, he was editor-in-chief at the Dallas Business Journal and business editor at the Cleveland Plain Dealer. MEMBERSHIP TERMS: If you choose a Lifetime Membership, you will pay a one-time charge of $5.00 where applicable, and you will be subject to the Terms and Conditions contained in this Agreement. Secondly, can Topgolf look up your membership? 12+ Lunar New Year food events and specials at D-FW restaurants, French bistro La Parisienne to open at The Star in Frisco, New Chick-fil-A opens in downtown Dallas this week, La Casita has become one of the biggest bakeries in D-FW, and its just getting started, New legislative push begins to end Confederate Heroes Day as an official Texas holiday, Dallas Cowboys signing kicker Tristan Vizcaino to practice squad, Dallas ranked among the most congested cities in the U.S. as work from home is phased out, Tax relief, border security, state worker pay raises among Texas Houses top wishes, The Dallas Morning News 2022 All-area teams, football awards and more, Prime Prosper corner just north of Universals future Frisco theme park hits the market, 5 things to know about Brett Maher, Cowboys kicking situation, New Frisco shopping center is moving ahead with developer funding. Morgan Stanley & Co. LLC and J.P. Morgan served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to Topgolf. Topgolf revenue is $220.0M annually. https://huddleup.substack.com/p/callaway-and-topgolf-breaking-down Upon arriving, he was immediately taken aback. It is classified as operating in the Arts, The foregoing list is not exhaustive. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. Athletic's got you covered. Will you try them? It expects that to grow to $3.2 billion by 2022 and at a 10% rate after that. Topgolf is doing some interesting things and is having an impact, said Scott Seymour, senior vice president and managing director of Octagons golf business. If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. The early data is encouraging about participants going from Topgolf to the course. The company is headquartered in Dallas, Texas. I have no business relationship with any company whose stock is mentioned in this article. On top of the golf experience, Topgolf customers can order food and beverage which is then brought out to them at tables and outdoor furniture located just behind the bays, which are usually situated on three stacked levels. 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. 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. Keep abreast of significant corporate, financial and political developments around the world. If you've never been to a Topgolf, it's basically the golf version of a bowling alley. I wondered if I could even get a bay.. 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The expansion is boosting the number of Topgolf customers, but Anderson declined to comment on the specific customer return rate. Every morning I write an email discussing the business and money behind sports. 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. 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. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. The golf industry as a whole has been on a It is something that the game hasnt seen in a while.. 2023 Leaders Group. 2023 Leaders Group. Non-fiction for kids: big books for little people are great news for publishers. See insights on TopGolf including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. 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. 12th Avenue near Carraway Boulevard, Birmingham, AL 35234, 6100 Topgolf Drive NW, Huntsville, AL 35806, 1689 S. SanTan Village Pkwy Gilbert, AZ 85295, 9500 E. Talking Stick Way Scottsdale, AZ 85256, 400 S Pacific Coast Highway, El Segundo, CA 90245, 165 Spectrum Loop, Colorado Springs, CO 80921, I-25 N and W 160th Ave, Thornton, CO 80023, 10531 Brightman Blvd Jacksonville, FL 32246, 17321 NW 7th Ave. Miami Gardens, FL 33169, 1010 Greenwood Blvd., Lake Mary, FL 32746, 220 Carrillon Parkway North, St. Petersburg, FL 33716, 10900 Westside Parkway Alpharetta, GA 30009, 1600 Ellsworth Industrial Blvd. Its an all stock deal which gives Topgolf an implied equity value of ~$2 billion. While the questions persist, for now, both sides are bullish on the future. With the completion of the 9 new venues in 2021, Topgolf will have 70 venues operating for the entirety of 2022. Check out how Callaways annual revenue has responded (Source): Which brings me to my next point Callaway is doubling down on diversification. The deal, announced Tuesday, creates a company that can draw in non-golfers to Topgolfs entertainment venues and expose them to the broader game, said Callaway CEO Chip Brewer, whose company sells golf clubs, balls, apparel and other equipment. Topgolf has done a wonderful job of running its business and creating an experience that is putting golf clubs in peoples hands.. You may change or cancel your subscription or trial at any time online. At Athletic Brewing, they're all about re-imagining beer for the modern adult. Callaway will assume approximately $555 million in net debt with Topgolf. Bottom line Topgolf has developed a unique way to engage an entire new generation of individuals that werent interested in golf before. Source: Created by Author with data from Yahoo Finance. Apart from Callaways previous 14% share in the golf-entertainment business, Topgolf also had major ownership stakes from Providence Equity Partners, WestRiver Group and Dundon Capital Partners, the Dallas-based investment arm of Carolina Hurricanes owner Tom Dundon. 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. Please disable your ad-blocker and refresh. After extensive research and analysis, Zippia's data science team found the following key financial metrics. Upon closing, the combined companys Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. The preliminary estimates presented above are the responsibility of management and have been prepared in good faith on a consistent basis with prior periods. The Dallas company has grown at a 30 percent compound annual rate since 2017 and recorded $1.06 billion in sales last year with a net loss of $114.9 million. 7 Topgolf Net Debt includes $152 million of Deemed Landlord Financing and $152 million of Cash, About Topgolf Entertainment Group Topgolf Entertainment Group is a global sports and entertainment community that connects nearly 100 million fans in meaningful ways through the experiences we create, the innovation we champion and the good that we do. We dont rule it out, Anderson said of the possibility of going public. Using management guidance, modest growth assumptions, and 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. Time for a thread , This site requires JavaScript to run correctly. 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. Callaway also will assume Topgolfs debt, which is estimated to be $555 million at closing. In addition, the Company has included in the schedules to this release a reconciliation of non-GAAP information to the most directly comparable GAAP information. Topgolf generated approximately $1.1 billion in revenue in 2019 and has grown at a 30% compound annual rate since 2017. Register for a free SBJ account to unlock one extra article per month. I have no business relationship with any company whose stock is mentioned in this article. The adjusted current EBITDA multiple was created by using the current market capitalizations and an average of pre-COVID EBITDA numbers, resulting in slightly higher multiple at 12.75x which is to be expected in todays market. Continued access to capital is a major priority if Topgolf is to continue its growth trajectory. Daily updates aggregating the stories and spin from more than 600 outlets across the globe. For cost savings, you can change your plan at any time online in the Settings & Account section. 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.. Topgolf peak revenue was $220.0M in 2021. Now that Callaway is buying Topgolf at a $2 billion valuation, a 50% haircut to their projected IPO price earlier this year, whats the plan? He previously worked as a business journalist for the Orlando Sentinel, Tulsa World and The Monitor in McAllen. Martins is a long-time sports executive who first started with the Magic in 1989. Topgolf will continue to operate from its headquarters in Dallas, Texas. 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