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. Topgolf projects adding more than 3,500 bays in 2020, and around 8,000 new bays per year starting in 2022. Access to easy-to-read digital editions of weekly issues. Callaway has invested in Topgolf twice already, in 2006 and 2018, amounting to an existing ownership stake of about 14%. At Athletic Brewing, they're all about re-imagining beer for the modern adult. cookies No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. See our list below of Topgolf locations currently open, coming soon (under construction) and rumored. More than two decades of archival stories, profiles, research and data. My guess is they go public in the next three years. Our recent investments into our e-commerce capabilities have proven particularly valuable, showing strong growth across all of our business segments this year including 108% growth in e-commerce for our soft goods segment in Q3.. Topgolf peak revenue was $220.0M in 2021. Weve 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. Investors are cautioned not to place undue reliance on such preliminary estimates. He's been The News' business editor since 2015. 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. Diluted earnings (loss) per share:. (1) Represents amortization expense of intangible assets from the acquisitions of OGIO, TravisMathew and Jack Wolfskin. A replay will be made available online approximately three hours following the live call and will remain available through October 27, 2021. While the eye-popping success of Topgolf has pleasantly surprised industry insiders and provided the sport with a jolt of innovation, just how much can Topgolfs massive draw help the golf business? 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. https://www.ft.com/content/a3573b9e-dca8-11e5-8541-00fb33bdf038 That doesnt include Callaways previous ownership stake. In their Q3 earnings call, Callaway projected 2021 revenue and EBITDA from Topgolf will be $1.06 billion and $158 million; this provides an EBITDA margin of 14.91%. The venues include golf driving bays that use its ball-tracing technology to make games out of the experience, along with food, music and golf retail. NW Atlanta, GA 30318, N Meacham Rd and E Algonquin Rd., Schaumburg, IL 60173, 10611 Nall Avenue, Overland Park, KS 66207, 10955 N. Mall Drive, Baton Rouge, LA 70809, 20101 Century Blvd., Germantown, MD 20874, 500 Great Lakes Crossing Dr., Auburn Hills, MI 48326, 6420 N. Camden Ave., Brooklyn Center, MN 55430, 16851 N. Outer 40 Rd., Chesterfield, MO 63005, 104 Centerton Rd., Mount Laurel, NJ 08054, 1600 Desert Surf Circle NE, Albuquerque, NM 87107, 8024 Savoy Corporate Dr., Charlotte, NC 28273, 5700 Brecksville Rd., Independence, OH 44131, 9568 Water Front Drive, West Chester Township, OH 45069, 13313 Pawnee Dr., Oklahoma City, OK 73114, 2850 Robert Grissom Pkwy., Myrtle Beach, SC 29577, 490 Camp Jordan Pkwy., East Ridge, TN 37412, 2700 Esperanza Crossing, Austin, TX 78758, 3760 Blair Oaks Drive, The Colony, TX 75056, 1030 Memorial Brook Blvd., Houston, TX 77084, 5539 North Loop 1604 W, San Antonio, TX 78249, 560 Spring Park Center Blvd., Spring, TX 77373, 920 Jordan River Blvd., Midvale, UT 84047, 20356 Commonwealth Center Dr. Ashburn, VA 20147, 5444 Greenwich Road, Virginia Beach, VA 23462. Anderson would not disclose any company financial information or the cost of building Topgolf venues, but building between seven and 10 new venues annually would require a hefty dose of capital. (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. 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). 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. John Lundgren will continue as Chairman of the Board of the combined company, while Erik Anderson will serve as Vice Chairman. Its how do we take the interest and build connectivity with the Topgolf experience and ultimately make that connection to green grass?. Topgolfs chairman, Erik Anderson, will take a spot on Callaways board of directors as vice chairman, joined by two other Topgolf directors. Its whether the locations they are building are consistent so that there is a reason for people to come back more than once.. I am currently a senior at Bentley University majoring in Finance and Entrepreneurship. Topgolf Entertainment Group's platforms include Topgolf venues, Topgolf International, Toptracer, Topgolf Media and Topgolf Swing Suite. 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. 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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. If you would like to receive it directly in your inbox, subscribe now. Churchill Downs has been home to some of the most incredible moments in sports history. Athletic's got you covered. Being the good friend I am, I read it so you dont have to lets run through it. 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. Note: The Company is providing information about its long-term forecasted results subsequent to December 31, 2022, excluding interest, taxes, depreciation and amortization expense, and non-cash stock compensation expense. Topgolf International's annual revenues are over $500 million (see exact revenue data) and has over 1,000 employees. Its those numbers that have participant-hungry golf courses and the national golf associations all clamoring to draft off Topgolfs success. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. and other data for a number of reasons, such as keeping FT Sites reliable and secure, The player data is immensely attractive. As a result, investors should exercise caution in relying on this information and should not draw any inferences from this information regarding financial or operating data not provided. 4 Based on 2022 projections 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. More than half of Topgolfs customers identify themselves as non-golfers, giving Callaway early exposure to potential golfers. This suggests that based on the current industry multiples and Topgolfs performance coming out of COVID, Callaway did not drastically overpay in the merger when you look towards the higher range of the valuation. 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. That is why we are so focused on content and experience.. For more information please visit www.callawaygolf.com, www.odysseygolf.com, www.OGIO.com, www.travismathew.com, and www.jack-wolfskin.com. Surely that should humble us a bit?, Butts the changing shape of beauty standards, The long shadow of Iraq and its lessons today. I am not receiving compensation for it (other than from Seeking Alpha). Callaway announced the deal along with its third-quarter financial results, noting 12% year-over-year revenue growth to $476 million. WebFounded in 2000, Topgolf is a sports entertainment facility that features hitting bays, a restaurant, and a bar. The number of shares issued is based upon an implied equity value of Topgolf of $1.986 billion6(including Callaways ownership position). Simply log into Settings & Account and select "Cancel" on the right-hand side. His family bootstrapped their business from their basement to an $8 billion acquisition, turning down $500M cash in the process. 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. And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. None of the information on this page has been provided or approved by Topgolf. Want to find out the nearest Topgolf location to you? It is time and circumstance specific.. Timely, daily updates provide the latest developments and news relied upon by industry leaders. (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. For a full comparison of Standard and Premium Digital, click here. 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. You may change or cancel your subscription or trial at any time online. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. 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. Morgan Stanley & Co. LLC and J.P. Morgan served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to Topgolf. Standard Digital includes access to a wealth of global news, analysis and expert opinion. 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. Additionally, EBITDAS excludes these same line items from forecasted net income. 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. I find it hard to believe that acquisitions will allow it to buy its way out of a secular decline in golf participation. Topgolf garnered an investment from Callaway in 2006 and expanded to the United States, now the primary market for the company. press@topgolf.com, Additional Information and Where You Can Find It. Get the latest business insights from Dun & Bradstreet. 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. Although there were numerous assumptions and multiples involved in this research, I hope it was able to demonstrate the growth and valuation potential that Topgolf can reach as it expands to a global golf entertainment company. 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. 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. Topgolfs ball-tracing technology is seen on televised golf broadcasts and its mobile golf game, World Golf Tour, boasts 28 million members. What started as a simple idea to enhance the game of golf has grown into a movement where people from all walks of life connect at the intersection of technology and sports entertainment. Click below to sign in. Callaway, Topgolf, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Callaway in connection with the proposed transaction. Averaging out these 2 years resulted in an EBITDA range of 8.20x to 11.65x. Callaway is issuing about 90M shares to facilitate the merger stock is down about 20% in response. Is this happening to you frequently? You have 2 All Access articles remaining this month. Topgolf is merging with Callaway in a deal valued at $2 billion 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. I never would have envisioned that it has become as popular as it is.. The companies together will be able to accelerate growth, including through: Together, Callaway and Topgolf create an unrivaled golf and entertainment business, said Chip Brewer, President and Chief Executive Officer of Callaway. 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. 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. 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 Dolf Berle will continue to lead the Topgolf business through a transition period following the close of the transaction, at which time he intends to step down to pursue other leadership opportunities. 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. People come back, it is a meaningful repeat business, he said. Over the course of the initial 20-year ground lease, once construction is completed and Topgolf is open for business, the county will receive more than $625,000 in annual revenue, benefiting the San Bernardino County Regional Parks system, https://parks.sbcounty.gov/, which includes nine regional parks throughout the county and The foregoing list is not exhaustive. https://www.sportsbusinessjournal.com/Journal/Issues/2018/04/02/In-Depth/Topgolf.aspx. It's a driving range where players of all skill levels can hit balls, each with an RFID chip in them, to different targets up and down the range. What is exciting is the belief that they can be LPGA viewers or on-site fans. Premium access for businesses and educational institutions. 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. 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. Upon arriving, he was immediately taken aback. 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. Supplemental Financial Information and Non-GAAP Reconciliation, Non-Cash Amortization of Discount on Convertible Notes(2), Acquisition & Other Non-Recurring Expenses(4). 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). 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. Capital is also needed to support the companys strategy to offer broader entertainment products either through acquisition or development. Their CEOs explain the strat Despite the US population increasing from 298M to 331M from 2006 to 2020an 11% increasethe number of golf participants in the United States hasnt followed suit, seeing a decline of about 20% during the same time period. Become a business insider. 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. 5 Excludes Deemed Landlord Financing Throughout trading in 2018 and 2019, the industry average EBITDA multiple ranged from 7.82x to 10.59x and 8.59x to 12.72x, respectively. 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. Players can choose to compete in several Topgolf games in which players earn points based on how well they hit to specific targets. The latest personnel hires and promotions, plus exclusive ratings and research from the sports industry. Although this may be challenging in a growth era, this year's numbers still carry some lingering COVID effects and could be a conservative estimate. 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. The non-GAAP information presented in this release and related schedules should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP. The company asked the city for $2.6 million in Kyle Arnold. Both companies are well positioned to take advantage of both short- and long-term changes in consumer behavior as a result of the pandemic. Each Topgolf location costs about $20 million to build, and these locations have typically paid for themselves in two years. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. We dont rule it out, Anderson said of the possibility of going public. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. Overhead can also run high, as Topgolf has about 15,000 full and part-time employees overall, which leads to staffing and training challenges as the company manages growth while focusing on providing a consistent and engaging fan experience. Award-winning original reporting, with in-depth profiles, timely research and expert opinions on the biggest issues and stories in sports business. 1 Golf Datatech industry report published September 21, 2020 The demographics making up Topgolfs customer base is exactly where Callaway is lacking. 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. 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. They need to be smart in how they reach and connect with those people.. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many users needs. Myrtle Beach, South CarolinaPlaces to Play. With over 100 different venues, its hard to narrow down just a few but here are some of the top rated by Golf Digest and Golf Magazine.Dunes Golf and Beach Club. The Dunes Golf and Beach Club was ranked #54 in Americas Top 100 Greatest public courses in 2019. Caledonia Golf and Fish Club. True Blue Golf Club. 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. 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. Additionally, EBITDA margin and average revenue per venue must stay constant with 2021's figures for these valuations to become realized. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Leaders Group. 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. The non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. We value who they reach and their diversity.. 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. This includes favorable trends in rounds played and growth in beginning and returning golfers as well as broader consumer preferences for outdoor activities.2,3The combined company will have a highly diversified revenue mix, including Golf Equipment, 30%; Topgolf, 46%; and Softgoods, 24%4. It starts with the fact that the millennial audience is largely focused on experiences, Horne said. 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. Another literal connective effort is Topgolfs latest plan to build a new venue on the site of a West Palm Beach, Fla., public golf course. Register for a free SBJ account to unlock one extra article per month. What began as a technology that enhanced the game of golf now encompasses a range of unmatched experiences where communities can discover common ground. Upon closing, the combined companys Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus/consent solicitation and other documents filed with the SEC by the parties through the website maintained by the SEC at www.sec.gov. Callaway and Topgolf both delivered strong financial results immediately before the COVID pandemic and have since recovered ahead of expectations. Through an unwavering commitment to innovation, Callaway manufactures and sells premium golf clubs, golf balls, golf and lifestyle bags, golf and lifestyle apparel and other accessories. You have to continue to reinvest in the experience.. (4) Represents certain non-recurring costs, including costs associated with the acquisition of Jack Wolfskin. See insights on TopGolf including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. 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 (. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. Both our golf equipment and soft goods businesses are recovering more quickly than we expected, and our third quarter projections reflect this momentum. The Callaway golf business, and the game of golf itself is experiencing unprecedented growth, Brewer said. We use the Golf News Net byline sometimes just to change things up. Topgolf charges include: Venue closure costs, a regulatory settlement reserve, the remeasurement of a contingent earnout obligation, and the remeasurement of a stock-warrant liability.