Callaway, Topgolf Announce Blockbuster Merger

Callaway Golf announced a massive merger on Tuesday in which the Carlsbad, California equipment manufacturer agreed to buy the rest of Topgolf Entertainment.

The two entities reached an all-stock deal that fills out the 14% ownership stake Callaway already owned of the driving range entertainment company. The deal values Topgolf at around $2 billion, and creates a company with 2019 pro-forma revenue of $2.8 billion — over $1.7 billion from Callaway and nearly $1.1 billion from Topgolf.

“Together, Callaway and Topgolf create an unrivaled golf and entertainment business,” Chip Brewer, Callaway’s president and CEO, said in the company’s release. “We’ve long seen the value in Topgolf and we are confident that together, we can create a larger, higher growth, technology-enabled global golf and entertainment leader.”


“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,” Dolf Berle, CEO of Topgolf, said.

The Wall Street Journal reported around mid-day Tuesday that the two parties were approaching a deal before it was made official before end of business.

Topgolf, which has 63 locations around the globe with more than 23 million customers, will continue to operate from its Dallas, Texas headquarters and Berle will lead Topgolf through a transition period following the close of the deal, but will then step away from the company to pursue “other leadership opportunities,” the companies said.

In addition to Callaway, the current Topgolf ownership includes Providence Equity Partners, WestRiver Group and Dundon Capital Partners.

Under the terms of the merger agreement, Callaway will issue approximately 90 million shares of its common stock to the shareholders of Topgolf, excluding Callaway. Upon completion of the merger, Callaway shareholders will own approximately 51.5% and Topgolf shareholders (excluding Callaway) will own approximately 48.5% of the combined company on a fully diluted basis. The number of shares issued is based upon an implied equity value of Topgolf of $1.986 billion.

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 parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions.

The combined company’s board will consist of 13 directors, including three appointed by Topgolf shareholders.