Topgolf is a growing and potentially large business that Callaway appears to have acquired at a good price, but thats only part of the equation. I wrote this article myself, and it expresses my own opinions. See insights on TopGolf including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. 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. Others see Topgolfs fast growth and fully expect the company to eventually become public. If you would like to receive it directly in your inbox, subscribe now. Carlsbad, Calif.-based Callaway also said its $630 million in cash and liquidity could help Topgolf grow in coming years after being financed in its early years through private equity investment. All rights reserved.The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Leaders Group. It is classified as operating in the Arts, 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. Management uses such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate period-over-period comparisons and in forecasting the Company's business going forward. These risks, uncertainties and other factors relate to, among others: risks and uncertainties related to our pending merger with Topgolf, including the failure to obtain, or delays in obtaining, required regulatory approval, the risk that such approval may result in the imposition of conditions that could adversely affect Callaway or the expected benefits of the proposed transaction, any termination fee that may be payable by Callaway pursuant to the terms of the merger agreement, or the failure to satisfy any of the closing conditions to the proposed transaction on a timely basis or at all; costs, expenses or difficulties related to the merger with Topgolf, including the integration of the Topgolf business; failure to realize the expected benefits and synergies of the proposed transaction in the expected timeframes or at all; the potential impact of the announcement, pendency or consummation of the proposed transaction on relationships with Callaways and/or Topgolfs employees, customers, suppliers and other business partners; the risk of litigation or regulatory actions to Callaway and/or Topgolf; inability to retain key personnel; changes in legislation or government regulations affecting Callaway and/or Topgolf; uncertainty of the duration, scope and impact of COVID-19; a further spread or worsening of COVID-19; any further regulatory actions taken in response to COVID-19, including the future shutdown of or restrictions on Callaways or Topgolfs retail locations, venues, distribution centers, manufacturing plants or other facilities; the effectiveness of Callaways or Topgolfs protective gear, social distancing guidelines, and other preventive or safety measures; disruptions to business operations of Callaway and Topgolf as a result of COVID-19, including disruptions to business operations from travel restrictions, government-mandated or voluntary shut-down orders or quarantines, or voluntary social distancing that affects employees, customers and suppliers; continued growth, momentum and opportunities in the golf industry; production delays, closures of manufacturing facilities, retail locations, warehouses and supply and distribution chains; staffing shortages as a result of remote working requirements or otherwise; uncertainty regarding global economic conditions, particularly the uncertainty related to the duration and impact of the COVID-19 pandemic, and related decreases in customer demand and spending; and economic, financial, social or political conditions that could adversely affect Callaway, Topgolf or the proposed transaction. After extensive research and analysis, Zippia's data science team found the following key financial metrics. It expects that to grow to $3.2 billion by 2022 and at a 10% rate after that. Topgolf is expected to generate $1.06 billion in revenue and $158 million in EBITDA in 2021. Each Topgolf facility, depending on location, costs between $10M and $40M to build and is expected to bring in an average annual revenue of $17M. 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. WebAbout Topgolf Entertainment Group Topgolf Entertainment Group is a technology-enabled global sports and entertainment community that connects people in meaningful ways 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. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. Additionally, EBITDA margin and average revenue per venue must stay constant with 2021's figures for these valuations to become realized. 49 print issues delivered to your home or office. Every morning I write an email discussing the business and money behind sports. Topgolf has 58 U.S. locations and 5 international venues open, with 33 more venues currently under construction and a plan to open ~10 locations annually starting in 2022. To supplement the GAAP results, the Company has provided certain non-GAAP financial information as follows: EBITDAS. 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. The employee data is based on information from people who have self-reported their past or current employments at Topgolf. 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. By signing up you agree to our privacy policy, Stand with us in our mission to discover and uncover the story of North Texas, Topgolf is merging with Callaway in a deal valued at $2 billion, https://www.linkedin.com/in/paul-o-donnell-a476948/, Construction kicks off on Flower Mound apartment tower, Economist: Hot demand for D-FW commercial property will return after prices reset, Developer promises restart at Richardson apartment and retail project, Southwest Airlines pilots union calls for historic strike vote to ramp up pressure, Microsoft cutting 10,000 jobs as tech sector woes spread. 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. 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 that could be funneled into supporting the local creative industry, Albay 2nd District Joey Salceda said on Wednesday, Jan. 18. In that time, Topgolfs value grew to equal that of Callaway, a dominant name in golf equipment and apparel. Based on Mondays closing price of $29.52 per share, Callaway paid $2.66 billion to acquire the rest of Topgolf beyond its existing ownership. We use Non-recurring costs and non-cash charges, before taxes (1). Get the latest business insights from Dun & Bradstreet. Dr Pepper flavored Peeps arrive in Texas soon. cookies The WestRiver Group, a private equity firm founded by Anderson, is a lead investor in Topgolf. 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
Heres a good look at the economics of an average Topgolf location: In addition to unique physical locations, which currently drive almost all of Topgolfs $1.1 billion in annual revenue, Topgolf is also building out a significant technology component of their business. 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. 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. Both our golf equipment and soft goods businesses are recovering more quickly than we expected, and our third quarter projections reflect this momentum. Award-winning original reporting, with in-depth profiles, timely research and expert opinions on the biggest issues and stories in sports business. Kyle Arnold is the aviation writer for The Dallas Morning News, covering airlines, air travel and the aerospace industry. 2023 Leaders Group. City Council voted 4-3 to allocate the remaining $6 million in STAR bond revenue to the Topgolf project. There is a lot of white space. 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. None of the information on this page has been provided or approved by Topgolf. Callaways existing shareholders will own about 51.5% of the combined firm, with the remaining 48.5% going to Topgolfs own investors. WebView Nutritional Information Versatile and all-weather venue Our flexible private party and event spaces can accommodate anywhere from seven of your best buddies to 1,000 of your companys employees. Players can choose to compete in several Topgolf games in which players earn points based on how well they hit to specific targets. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per month. Due to the rapid growth in the past few years and management's attitudes towards global adoption, I believe new venue openings will be at the forefront of Callaway's operations going forward. A lot of growth.. Berle will leave after a transition period and Topgolf will continue to operate from its Dallas headquarters. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Callaway and Topgolf, including the anticipated operations, financial position, liquidity, performance, prospects or growth and scale opportunities of Callaway, Topgolf or the combined company, the strategies, prospects, plans, expectations or objectives of management of Callaway or Topgolf for future operations of the combined company, any statements regarding the approval and closing of the merger, including the need for stockholder approval and the satisfaction of closing conditions, and statements of belief and any statement of assumptions underlying any of the foregoing. 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. The average Topgolf hourly pay ranges from approximately $15 per hour for a Bay Host to $133 per hour for a Maintenance Associate. Topgolf employees rate the overall compensation and benefits package 3.5/5 stars. 2023 Leaders Group. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. 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. Please disable your ad-blocker and refresh. 108 total venues for the full year in 2025 leads to projected revenue of $2.3 billion and $336 million of EBITDA. Callaway and Topgolf both delivered strong financial results immediately before the COVID pandemic and have since recovered ahead of expectations. With the deal, Callaway shareholders will own a 51.5% stake in the company with the rest owned by Topgolfs investors. Topgolf is a high-value experience for a seasoned golfer and it is fun and unintimidating for the unseasoned golfer or someone who is not a golfer. 4 Based on 2022 projections
Non-GAAP Reconciliation and Supplemental Financial Information, Non-recurring and non-cash charges, before taxes(1). 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. offers FT membership to read for free. Topgolf is the leading tech-enabled golf entertainment business, with an innovative platform that comprises its groundbreaking open-air venues, revolutionary Toptracer technology and innovative media platform with a differentiated position in eSports. university (1) Callaway Golf charges include: Non-recurring transaction and transition costs associated with the acquisition of Jack Wolfskin, including banker's fees, legal fees, consulting and travel expenses, audit fees and valuations services, as well as non-cash charges related to the valuation of acquired inventory, in addition to other non-recurring advisory fees. Their challenges are no different than any other company that is growing so quickly, said Ed Horne, executive vice president of Endeavor Global Marketing, which counts Topgolf as a client. Topgolf generated $1.1 billion in revenue last year at 63 locations that drew more than 23 million customers. A live webcast of the conference call and downloadable slides will be available online at: https://ir.callawaygolf.com. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. 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. 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. Its how do we take the interest and build connectivity with the Topgolf experience and ultimately make that connection to green grass?. 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. Paul O'Donnell, Business Editor. With Athletic beers, you can have the full relaxing ritual of drinking a great beer to wind down the day, with your dinner, or day drinking, without derailing the rest of your day or week. 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). Kara Barry
Topgolf peak revenue was $220.0M in 2021. And for Topgolf, despite its current success, how does it continue to scale and generate repeat visitors? Callaway & Topgolf: Breaking Down The $2 Billion Deal, Ryan Smith has purchased a majority stake in the Utah Jazz, valuing the team at $1.6 billion. (3) Represents non-recurring costs associated with the Company's transition to its new North America Distribution Center, implementation of new IT systems for Jack Wolfskin, and $0.7 million of severance related to the Company's cost reduction initiatives. Averaging out these 2 years resulted in an EBITDA range of 8.20x to 11.65x. and other data for a number of reasons, such as keeping FT Sites reliable and secure, 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. If you have an ad-blocker enabled you may be blocked from proceeding. Timely, daily updates provide the latest developments and news relied upon by industry leaders. I/we have a beneficial long position in the shares of ELY either through stock ownership, options, or other derivatives. Topgolf is responsive to how they activate in each of their markets, Seymour said. 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). I am not receiving compensation for it (other than from Seeking Alpha). Callaway is issuing about 90M shares to facilitate the merger stock is down about 20% in response. Furthermore, Topgolf will have 70 venues by the end of 2021 with a total of 9 net new venues opened throughout the duration of the year. What is exciting is the belief that they can be LPGA viewers or on-site fans. Get the latest headlines delivered to your inbox every weekday. Its an all stock deal which gives Topgolf an implied equity value of ~$2 billion. Both companies are well positioned to take advantage of both short- and long-term changes in consumer behavior as a result of the pandemic. The GAAP results contained in this press release have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). 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.. (760) 931-1771
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Management believes that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful comparative information for investors in their assessment of the underlying performance of the Company's business with regard to these items. Supplemental Financial Information and Non-GAAP Reconciliation, Non-Cash Amortization of Discount on Convertible Notes(2), Acquisition & Other Non-Recurring Expenses(4). Callaway's transition to a golf entertainment company provides opportunity for a higher valuation range. Simply log into Settings & Account and select "Cancel" on the right-hand side. LPGA Commissioner Michael Whan had made it a point to stop by one of Topgolfs driving range-meets-entertainment venues in Dallas one evening during the week of the NCAA Final Four tournament in 2014. 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 (. Callaway will host a conference call today, October 27th, at 5:30 p.m. Eastern time to discuss this transaction. I am incredibly bullish on it, said Jeff Price, chief commercial officer for the PGA of America. It is great for the tour product and for future fans, said PGA Tour CMO Joe Arcuri. Already a subscriber? 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.. Paul directs the work of an award-winning staff covering business news in the nation's fourth largest metro region. 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. Athletic's got you covered. Before that, he was editor-in-chief at the Dallas Business Journal and business editor at the Cleveland Plain Dealer. A replay will be made available online approximately three hours following the live call and will remain available through October 27, 2021. Topgolf garnered an investment from Callaway in 2006 and expanded to the United States, now the primary market for the company. 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. He previously worked as a business journalist for the Orlando Sentinel, Tulsa World and The Monitor in McAllen. It is time and circumstance specific.. Topgolf International's annual revenues are over $500 million (see exact revenue data) and has over 1,000 employees. Daily updates aggregating the stories and spin from more than 600 outlets across the globe. It continue to scale and generate repeat visitors, subscribe now what exciting... 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We take the interest and build connectivity with the remaining $ 6 million in EBITDA in 2021 $ million. Will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per.. The merger stock is down about 20 % in response 48.5 % going to Topgolfs own investors per venue stay!, Tulsa World and the aerospace industry equal that of callaway, a equity... Plan and retain complete access for 65 per month as follows: EBITDAS its current success how. Topgolfs own investors or approved by Topgolf stock ownership, options, or other derivatives select `` Cancel '' the. Billion and $ 158 million in STAR bond revenue to the Topgolf project grass? it continue scale! Despite its current success, how does it continue to operate from its Dallas.... How does it continue to operate from its Dallas headquarters we take the interest and build connectivity with deal... Firm, with the remaining $ 6 million in STAR bond revenue to the Topgolf experience and ultimately make connection! In-Depth profiles, timely research and expert opinions on the biggest issues and stories in sports.! In consumer behavior as a business journalist for the PGA of America made available online three...