A South Korean newspaper is reporting today that golf’s biggest company, Topgolf Callaway, may be up for sale.
That’ll put a jolt in your Wednesday, won’t it?
The Chosun Daily is reporting that Topgolf Callaway’s three largest investors are joining together to sell their ownership stakes and management rights. Those major shareholders include BlackRock Advisors LLC, Providence Equity Partners LLC and Thomas Dundon. Together they own over 33 percent of Topgolf Callaway shares.
The paper also reports that the plan is to spin off the Topgolf business and sell the Callaway golf and apparel business for approximately $3 billion.
A South Korean investment company is said to be the leading candidate to land the Callaway business.
One important note: no other major news outlet has confirmed the Chosun Daily story.
Topgolf Callaway share prices soared in premarket trading as a result of the report. Prices reached a 2024 high of $16.25. The current price as of this writing is up over 11.5 percent over yesterday.
Topgolf Callaway this afternoon issued this statement:
“While it is our long-standing practice not to respond to market rumors and speculation, in light of today’s unusual market activity, coupled with a recent media report originating in Korea regarding discussions of a potential sale of the Company or its golf equipment business, we confirm that we are not aware of any such discussions. We do not intend to comment further on this topic, and we assume no obligation to make any further announcement or disclosure should circumstances change.”
WOW, Just WOW
Topgolf Callaway finished 2023 with total sales topping $4.28 billion, with an annual profit of $95 million. All three of the company’s business units finished the year with at least $1 billion in sales, led by the Topgolf division at $1.76 billion. The company opened 11 new Topgolf venues in 2023, with plans for eight more to be opened this year.
The Callaway brand finished 2023 as the leading golf equipment brand, with No. 1 market share positions in total clubs, drivers, fairway woods, hybrids and irons.
If this story is true and the Callaway brand is sold to a South Korean entity, that would make three of the top four companies in golf owned by South Korean interests. Controlling interest in the publicly traded Acushnet, the parent company of Titleist, was acquired by FILA in 2011. Seoul-based private equity firm Centroid Investment Partners bought TaylorMade in 2021.
It may be unrelated, but yahoo/finance is reporting that Centroid said last month it’s in the process of raising a $500 million fund for a new acquisition.
PING remains privately owned by the Solheim family.
COBRA is owned by PUMA which, like Acushnet and Topgolf Callaway, is publicly traded. Its largest shareholder is the Pinault Francois family.
What This Means
It’s way to early to tell. But if it does come to fruition is represents a seismic change in the golf landscape. It should not be considered a death knell for Callaway, however, or even a negative. South Korean ownership has not hurt the business for either TaylorMade or Acushnet nor has it impacted the overall quality or performance of each company’s equipment.
Any potential sale is simply a byproduct of being a publicly traded company in a global market.
Callaway merged with Topgolf in March of 2021 (it already owned a 20 percent stake), and rebranded itself as Topgolf Callaway. The deal was worth a reported $2 billion. Shortly after the merger, Topgolf Callaway stock peaked at nearly $37 per share. Despite record annual sales the past two years, the stock dropped to a low of $10.05 last November. It closed at $13.91 yesterday before reports of a possible sale broke.
Still Just a Rumor
Once again, while this story is being widely reported, it has not been confirmed outside of the Chosun Daily report. Investment analysts are urging caution. but some see it as a potentially positive move for both Callaway and Topgolf.
Raymond James analyst Joseph Altobellow, quoted by yahoo/finance, says “A separation of the two businesses could make strategic sense, as they offer little in the way of synergies.” In its annual report, Topgolf Callaway announced it would be making efforts to sell its golf equipment through Topgolf venues, placing Topgolf teaching pros on Callaway staff and making its equipment available to rent at each venue.
Business Insider is reporting heavy trading of Topgolf Callaway shares today. As of late this morning, nearly five million shares had been traded. That’s nearly double the average daily volume of 2.7 million shares.
MyGolfSpy will update this article throughout the day as more information becomes available.
Larry
1 month ago
TOPGOLF has a shelf life, I would say it is safe to say within 10 years they will be closing or selling off to independent owners many if not all the TOPGOLF locations. Look how many driving ranges have gone through the ups and downs and ended up closed because they just could not make it selling buckets of balls and could not afford to keep up cheapening/putting greens or even keep balls half way descent. Your talking FAD with TOPGLOLF and FADS do not last forever.