By 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.. Subscribe to receive our press releases via email: Topgolf Kicking Off 2023 with Opening of Charleston Venue, Pro forma revenue of approximately $2.8 billion based on fiscal year 2019 results that is expected to grow to approximately $3.2 billion by 2022 and at approximately 10% per year in the years following, Pro forma adjusted EBITDAS of $270 million based on fiscal year 2019 results that is expected to grow to approximately $360 million by 2022 and at mid-to-high teens per year in the years following. 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. Disclosure: I/we have a beneficial long position in the shares of ELY either through stock ownership, options, or other derivatives. 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. (760) 931-1771 For obvious reasons, 2020 was excluded when determining the industry average. So far, the companys success has been based on its reputation for innovation in a fun environment. Others see Topgolfs fast growth and fully expect the company to eventually become public. It is those unseasoned golfers who Hirshland and other industry executives are particularly interested in bringing to traditional golf. If you have an ad-blocker enabled you may be blocked from proceeding. Topgolf is merging with Callaway in a deal valued at $2 billion 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 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, which currently holds approximately 14% of Topgolfs outstanding shares. On a percentage basis, over 95% of Topgolfs revenue is broken out evenly between gameplay, events, and food & beverage which is interesting considering a typical driving range might hardly make any money off food & beverage or events. Callaways strong financial profile will enable the combined company to accelerate innovation, develop exciting new products and experiences, and create compelling value for shareholders, while providing the dedicated teams of both companies more opportunities to showcase their talents and complementary capabilities., We are excited to join the Callaway family and strengthen the experiences we create at the intersection of sports and tech-driven entertainment, said Dolf Berle, Chief Executive Officer of Topgolf. 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. 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. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. That doesnt include Callaways previous ownership stake. Diluted earnings (loss) per share:. (1) Represents amortization expense of intangible assets from the acquisitions of OGIO, TravisMathew and Jack Wolfskin. Topgolf projects adding more than 3,500 bays in 2020, and around 8,000 new bays per year starting in 2022. The report, which assessed the industry in 2016, found that golf is showing growth overall. Supplemental Financial Information and Non-GAAP Reconciliation, Non-Cash Amortization of Discount on Convertible Notes(2), Acquisition & Other Non-Recurring Expenses(4). 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. 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. But, it's one of us humans writing the story, we promise. 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. 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. In that time, Topgolfs value grew to equal that of Callaway, a dominant name in golf equipment and apparel. Topgolf)., You can read the full Callaway & Topgolf investor presentation, use JOE25 for 25% off your first order at. Revenue at golf courses and clubs improved from $29.9 billion in 2011 to Standard Digital includes access to a wealth of global news, analysis and expert opinion. For Callaway: 2023 Leaders Group. 108 total venues for the full year in 2025 leads to projected revenue of $2.3 billion and $336 million of EBITDA. Holding all other assumptions constant, Topgolf could be worth $17.9 billion and $95.91 per share if Callaway can effectively expand internationally. 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. What that success means in terms of revenue and profitability arent made public by the privately held company, but the company has found the formula to attract a crush of interest from both golfers and non-golfers alike. (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. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. WebFounded in 2000, Topgolf is a sports entertainment facility that features hitting bays, a restaurant, and a bar. 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. 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. This communication is for information purposes only and is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. I wondered if I could even get a bay.. 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. 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. Through $750 million in acquisitions of premium apparel, footwear, and equipment brands like Jack Wolfskin, TravisMathew and Ogio, Callaway has desperately attempted to diversify their business and cater to a younger demographic which seems to be losing interest in golf or never picked it up in the first place. Stay informed and spot emerging risks and opportunities with independent global reporting, expert Premium access for businesses and educational institutions. We are not nave to say we would never look at it. More than two decades of archival stories, profiles, research and data. I am currently a senior at Bentley University majoring in Finance and Entrepreneurship. 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). Capital is also needed to support the companys strategy to offer broader entertainment products either through acquisition or development. 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. INVESTORS AND STOCKHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS/ CONSENT SOLICITATION, AND OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLAWAY GOLF COMPANY, TOPGOLF INTERNATIONAL, INC., THE PROPOSED TRANSACTION AND RELATED MATTERS. Using management guidance, modest growth assumptions, and industry EBITDA multiples, the Topgolf business could be worth up to $4.3 billion by 2025. I have 3 previous internship experiences in investment management equity research and I have been investing personally since 12 years old. This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Topgolf is expected to generate $1.06 billion in revenue and $158 million in EBITDA in 2021. We see a lot of ways with golf to have a meaningful business, said Erik Anderson, executive chairman of Topgolf Entertainment. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Leaders Group. Dallas-based Topgolf Entertainment Group is merging with publicly traded golf brand Callaway in an all-stock transaction that values the golf entertainment business at $2 billion. Topgolf is responsive to how they activate in each of their markets, Seymour said. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. 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. Kyle Arnold. I am incredibly bullish on it, said Jeff Price, chief commercial officer for the PGA of America. 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 majority of Topgolfs revenue comes from physical locations, but they also have a growing technology business, which Callaway envisions being a significant source of revenue in the future. For a full comparison of Standard and Premium Digital, click here. Attention spans scatter. Goldman Sachs & Co. LLC served as the financial advisor to Callaway and Latham & Watkins LLP served as legal counsel. Source: Created by Author with data from Yahoo Finance. With such dizzying expansion, its no surprise that the PGA Tour, PGA of America and LPGA have promotional partnerships with the company in an attempt to convert the hordes of casual and non-golfers who are flocking to Topgolf over to traditional golf. and other data for a number of reasons, such as keeping FT Sites reliable and secure, 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 (see related story). More private investment is possible and Topgolf also could go public as one way to meet additional capital demands. 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. Getting good locations is hard, training is hard and we compete against all forms of entertainment, Anderson said. If you havent seen it, check it out its worth the read. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per month. To supplement the GAAP results, the Company has provided certain non-GAAP financial information as follows: EBITDAS. Gambling problem? We value who they reach and their diversity.. Topgolf).. What do legacy golf companies like Callaway plan to do about it? Topgolf garnered an investment from Callaway in 2006 and expanded to the United States, now the primary market for the company. The employee data is based on information from people who have self-reported their past or current employments at Topgolf. analyse how our Sites are used. 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 non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. 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. 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. Founded in 2000, Topgolf has reinvented the concept of golfs antiquated driving range to attract both golf aficionados and novices alike, turning it into a destination venue for people to play technology-enabled golf games accompanied by music, food, and drinks. You can still enjoy your subscription until the end of your current billing period. A replay will be made available online approximately three hours following the live call and will remain available through October 27, 2021. 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. Kyle Arnold is the aviation writer for The Dallas Morning News, covering airlines, air travel and the aerospace industry. Topgolf will continue to operate from its headquarters in Dallas, Texas. Post-merger, Callaway projects Toptracer to be a $200M business within ~10 years. Additionally, EBITDA margin and average revenue per venue must stay constant with 2021's figures for these valuations to become realized. Callaway already had an exclusive relationship with Topgolf, which put their clubs, merchandise, and apparel in every location worldwide, but you can expect Callaway penetrate that relationship even more. Martins talks with SBJs Abe Madkour about coming up through the business from the communications side, what he learned during stints with multiple teams, and why he looks for emotional intelligence when interviewing job candidates. 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. Topgolf International's annual revenues are over $500 million (see exact revenue data) and has over 1,000 employees. Each Topgolf location costs about $20 million The demographics making up Topgolfs customer base is exactly where Callaway is lacking. 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. 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 Is this happening to you frequently? More than half of Topgolfs customers identify themselves as non-golfers, giving Callaway early exposure to potential golfers. Simply log into Settings & Account and select "Cancel" on the right-hand side. 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. 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. Topgolf generated approximately $1.1 billion in revenue in 2019 and has grown at a 30% compound annual rate since 2017. GNN may earn a commission from sales generated by those links. All rights reserved. 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). Whatever it has been doing has not been working. 4 Based on 2022 projections Topgolf is doing some interesting things and is having an impact, said Scott Seymour, senior vice president and managing director of Octagons golf business. Want to find out the nearest Topgolf location to you? Callaways existing shareholders will own about 51.5% of the combined firm, with the remaining 48.5% going to Topgolfs own investors. 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. personalising content and ads, providing social media features and to I wrote this article myself, and it expresses my own opinions. Callaways continued strong cash generation and ample liquidity, including more than $630 million of cash and available credit facilities as of Q3 2020, position the company to fund Topgolfs continued growth with significant ability to pay down debt at the same time. The Callaway golf business, and the game of golf itself is experiencing unprecedented growth, Brewer said. Non-recurring costs and non-cash charges, before taxes (1). 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. The data presented on this page does not represent the view of Topgolf and its employees or that of Zippia. For cost savings, you can change your plan at any time online in the Settings & Account section. What began as a technology that enhanced the game of golf now encompasses a range of unmatched experiences where communities can discover common ground. growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. Sorry, something went wrong with the copy but here is the link for you. WebTopgolf: An entertainment complex that provides competitive golfing games for individuals and groups of all ages and skill levels. Topgolf may also be known as or be related to TopGolf International, Inc., Topgolf, Topgolf Entertainment Group, Topgolf International, Topgolf International Inc and Topgolf International, Inc. Stars and Strikes Family Entertainment Centers, Stars and Strikes Family Entertainment Centers Revenue, Stars and Strikes Family Entertainment Centers Reviews, Stars and Strikes Family Entertainment Centers Careers, Private Equity Round - Topgolf Entertainment Group. 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.