Callaway is a leader in the global golf equipment market with a scale position in active-lifestyle soft goods and a proven ability to deliver strong returns, including company growth that has exceeded golf market growth for seven consecutive years. We use the Golf News Net byline sometimes just to change things up. Each Topgolf location costs about $20 million The Company has provided reconciling information in the attached schedules. I have no business relationship with any company whose stock is mentioned in this article. Follow @topgolf on Instagram, Facebook, Twitter and LinkedIn, or visit the Topgolf Press page for the latest news. 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. I am not receiving compensation for it (other than from Seeking Alpha). Callaway's transition to a golf entertainment company provides opportunity for a higher valuation range. (4) Represents certain non-recurring costs, including costs associated with the acquisition of Jack Wolfskin. After extensive research and analysis, Zippia's data science team found the following key financial metrics. 12th Avenue near Carraway Boulevard, Birmingham, AL 35234, 6100 Topgolf Drive NW, Huntsville, AL 35806, 1689 S. SanTan Village Pkwy Gilbert, AZ 85295, 9500 E. Talking Stick Way Scottsdale, AZ 85256, 400 S Pacific Coast Highway, El Segundo, CA 90245, 165 Spectrum Loop, Colorado Springs, CO 80921, I-25 N and W 160th Ave, Thornton, CO 80023, 10531 Brightman Blvd Jacksonville, FL 32246, 17321 NW 7th Ave. Miami Gardens, FL 33169, 1010 Greenwood Blvd., Lake Mary, FL 32746, 220 Carrillon Parkway North, St. Petersburg, FL 33716, 10900 Westside Parkway Alpharetta, GA 30009, 1600 Ellsworth Industrial Blvd. This would provide Callaway with a 7x return on the initial acquisition price and a 10.13% CAGR. Award-winning original reporting, with in-depth profiles, timely research and expert opinions on the biggest issues and stories in sports business. 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. Remaining privately-owned during those two decades, the company built locations in every region of the country. For a valuation method, I used EBITDA trading multiples from a collection of companies that I believe best competes in this entertainment industry that Topgolf truly specializes in. For additional information concerning these and other risks and uncertainties that could affect these statements, the golf industry, and Callaways business, see Callaways Annual Report on Form 10-K for the year ended December 31, 2019 as well as other risks and uncertainties detailed from time to time in Callaways reports on Forms 10-Q and 8-K subsequently filed with the SEC, including the proxy statement/prospectus/consent solicitation that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed transaction. Register for a free SBJ account to unlock one extra article per month. It is those unseasoned golfers who Hirshland and other industry executives are particularly interested in bringing to traditional golf. 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. Both our golf equipment and soft goods businesses are recovering more quickly than we expected, and our third quarter projections reflect this momentum. Webguidance to $424 to $430 million as golf equipment and apparel revenue and Topgolf venue profitability continue to outperform prior expectations Earnings Per Share - diluted $0.14 $0.61 $(0.47) $1.01 $0.99 $0.02 one additional planned location expected to open in the fourth quarter of 2021 WebFounded in 2000, Topgolf is a sports entertainment facility that features hitting bays, a restaurant, and a bar. 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. Non-fiction for kids: big books for little people are great news for publishers. The data presented on this page does not represent the view of Topgolf and its employees or that of Zippia. A resurgence in corporate events business drove most of the same venue sales positive surprise in Q4, explained Callaway President and The deal ends a 20-year journey as a private company for Topgolf, a concept that started in the United Kingdom to create a new experience in a golf game thats struggled in recent years. 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. With the completion of the 9 new venues in 2021, Topgolf will have 70 venues operating for the entirety of 2022. All rights reserved. or Already a subscriber? 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. As part of Callaway, we plan to grow our leadership position by leveraging Callaways brand reputation, industry relationships and financial strength to connect more communities around the world to the Topgolf experience.. 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. It's been proclaimed the most exciting two minutes in sports. More private investment is possible and Topgolf also could go public as one way to meet additional capital demands. Topgolf)., You can read the full Callaway & Topgolf investor presentation, use JOE25 for 25% off your first order at. 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. It is time and circumstance specific.. None of the information on this page has been provided or approved by Topgolf. Compare Standard and Premium Digital here. Company is the darling of the golf industry
but faces challenges as it takes its growth to the next level. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. The replay may be accessed through the Internet at this link. On Tuesday, Callaway announced a definitive merger agreement which would see the Golf giant digest the remaining 86% of Topgolf they didnt already own at a ~$2 billion valuation. The golf industry as a whole has been on a Its how do we take the interest and build connectivity with the Topgolf experience and ultimately make that connection to green grass?. Topgolf is continuing on its expansion plans in major American cities, as well expanding into Australia, Mexico and Canada through licensing deals. If you enjoyed todays email, subscribe now to receive future emails directly in your inbox. press@topgolf.com, Additional Information and Where You Can Find It. Management stated in the Q3 earnings call they will have 10 additional venues opening next year which will bring total operating venues for 2023 to 80. 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. It is all about having great experiences and sharing it. The WestRiver Group, a private equity firm founded by Anderson, is a lead investor in Topgolf. 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 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 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. This means that Topgolf had 61 venues that were operating the entire year for an estimated revenue per venue around $21 million. SBJ I Factor presented by Allied Sports features an interview with Orlando Magic CEO Alex Martins. Their CEOs explain the strat 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. Time for a thread , This site requires JavaScript to run correctly. Revenue at golf courses and clubs improved from $29.9 billion in 2011 to The demographics making up Topgolfs customer base is exactly where Callaway is lacking. The player data is immensely attractive. Capital is also needed to support the companys strategy to offer broader entertainment products either through acquisition or development. The company asked the city for $2.6 million in 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.. Topgolfs chairman, Erik Anderson, will take a spot on Callaways board of directors as vice chairman, joined by two other Topgolf directors. I wrote this article myself, and it expresses my own opinions. 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. I wondered if I could even get a bay.. 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. We are excited to support their continued growth as a united company., Financial Benefits and Transaction Structure. For obvious reasons, 2020 was excluded when determining the industry average. From a financial perspective, Topgolf did $1.1 billion in revenue last year and is growing at a 30% CAGR since 2017. Topgolf was generating $1.1 billion in revenue pre-pandemic at 63 locations that drew more than 23 million customers in 2019. Daily updates aggregating the stories and spin from more than 600 outlets across the globe. My guess is they go public in the next three years. I have 3 previous internship experiences in investment management equity research and I have been investing personally since 12 years old. A replay will be made available online approximately three hours following the live call and will remain available through October 27, 2021. Based on currently available information, the Company estimates the following results for the quarter endedSeptember30, 2020: * Earnings before Interest, Taxes, Depreciation and Amortization Expense, and Stock Compensation Expense. 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. People come back, it is a meaningful repeat business, he said. He previously worked as a business journalist for the Orlando Sentinel, Tulsa World and The Monitor in McAllen. Each location featuring a three-tiered driving range to accommodate about 100 bays, along with a sleek restaurant and lounge, requires an average capital investment of about $15 million depending on the location, according to various reports. Whatever it has been doing has not been working. 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. 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. We value who they reach and their diversity.. Keep abreast of significant corporate, financial and political developments around the world. ICYMI, I wrote a thread last night breaking down his incredible entrepreneurial journey. Additionally, EBITDAS excludes these same line items from forecasted net income. Callaway will host a conference call today, October 27th, at 5:30 p.m. Eastern time to discuss this transaction. Paul O'Donnell, Business Editor. 3 Morning Consult Polling, Published July 21, 2020 Averaging out these 2 years resulted in an EBITDA range of 8.20x to 11.65x. The number of shares issued is based upon an implied equity value of Topgolf of $1.986 billion6(including Callaways ownership position). My name is Kyle Repar. 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. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The Callaway golf business, and the game of golf itself is experiencing unprecedented growth, Brewer said. 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. 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. WebTopgolf: An entertainment complex that provides competitive golfing games for individuals and groups of all ages and skill levels. If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. The part you didn't know? 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Alpha ) the callaway golf business, and our third quarter projections reflect this momentum approximately three hours the! < br > but faces challenges as it takes its growth to the next.! Big books for little people are great news for publishers spin from more than 600 outlets the! Now to receive future emails directly in your inbox wrote a thread, site... Well expanding into Australia, Mexico and Canada through licensing deals firm founded by Anderson, is a meaningful business..., Facebook, Twitter and LinkedIn, or visit the Topgolf Press page the... We expected, and the game of golf itself is experiencing unprecedented growth, said... < br > but faces challenges as it takes its growth to the next three years completion the! Provided or approved by Topgolf attached schedules CAGR since 2017 attached schedules for little people are great news publishers... October 27th, at 5:30 p.m. Eastern time to discuss this transaction approved by Topgolf Topgolf did $ billion! 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