Topgolf Callaway Brands has completed the sale of a 60 percent stake in its Topgolf and Toptracer businesses to private equity funds managed by Leonard Green & Partners for approximately $1.1 billion (€1.05bn), while repaying $1 billion in debt and reverting to the Callaway Golf Company name.
Following the transaction, Topgolf Callaway Brands repaid $1 billion (€955m) of outstanding borrowings under its term loan B facility. The company now has approximately $480 million (€458m) in outstanding debt and unrestricted cash and cash equivalents of approximately $680 million (€649m). Management plans to use a portion of the proceeds to repay its convertible notes, which mature in May 2026.
Strategic reset delivers financial flexibility
The transaction represents a strategic pivot for the company, which will change its name back to Callaway Golf Company on or about Jan. 15, with its New York Stock Exchange ticker symbol changing from MODG to CALY on or about Jan. 16. Chip Brewer, President and Chief Executive Officer, said the deal “positions both companies as separate, well-capitalized, focused, pure play businesses that should thrive in their respective spaces.” The company maintains a 40 percent retained stake in Topgolf and preserves marketing synergies through a strategic partnership.
The board of directors authorized a new $200 million (€191m) stock repurchase program, which replaces any unused portion of the prior program. Brewer emphasized the company is “not only significantly reducing our leverage but also reinforcing our commitment to delivering long-term value for our shareholders.”
This deal means a return to core golf focus
The divestiture marks the unwinding of Topgolf Callaway Brands’ attempt to combine golf equipment manufacturing with entertainment-focused golf venues. The 2021 merger that created the combined entity valued Topgolf at $4 billion (€3.82bn), making the current $1.1 billion (€1.05bn) valuation a significant markdown that reflects challenges in the entertainment venue sector.
By separating the businesses and dramatically reducing debt, Callaway Golf can refocus on its premium golf equipment, apparel and accessories portfolio, which includes the Callaway Golf, Odyssey, TravisMathew and OGIO brands. The company retains exposure to Topgolf’s potential upside through its minority stake while eliminating the operational complexity and capital requirements of managing entertainment venues. Private equity involvement through Leonard Green & Partners suggests potential operational improvements and possible further consolidation in the golf entertainment space.
About Leonard Green & Partners
Leonard Green & Partners is a private equity firm founded in 1989 that invests in established companies across multiple sectors including retail, consumer, healthcare and business services. The firm manages approximately $75 billion (€71.6bn) in assets.
Via: PR Newswire
