In that time, Topgolfs value grew to equal that of Callaway, a dominant name in golf equipment and apparel. 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. Stay informed and spot emerging risks and opportunities with independent global reporting, expert 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. Kyle Arnold is the aviation writer for The Dallas Morning News, covering airlines, air travel and the aerospace industry. Sometimes we post sponsored content from this account, and it is labeled as such. 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. Topgolf now has 38 U.S. and three overseas venues where customers can hit chip-embedded balls at high-tech driving range targets in a lounge-like atmosphere, complete with DJs and drink specials. Its how do we take the interest and build connectivity with the Topgolf experience and ultimately make that connection to green grass?. 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. Topgolf Entertainment Group is a technology-enabled global sports and entertainment community that connects people in meaningful ways through the experiences we create, the innovation we champion and the good we do. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. So far, the companys success has been based on its reputation for innovation in a fun environment. 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. Dr Pepper flavored Peeps arrive in Texas soon. Any environment where individuals are swinging golf clubs is terrific, said Sarah Hirshland, senior managing director of business affairs for the USGA, which last year partnered with Topgolf to hold U.S. Open watch parties at all Topgolf venues. But, it's one of us humans writing the story, we promise. That is why we are so focused on content and experience.. 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. All rights reserved. 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. (760) 931-1771 I wrote this article myself, and it expresses my own opinions. Carlsbad, Calif.-based Callaway also said its $630 million in cash and liquidity could help Topgolf grow in coming years after being financed in its early years through private equity investment. My name is Kyle Repar. 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. Its not exactly clear yet, but id expect more of the same. 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). 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. Other lead investors include Callaway, which took a stake in the company in 2006; Carolina Hurricanes owner Thomas Dundon, who bought a stake in 2011; and Providence Equity, which took an undisclosed stake in 2016. The company is headquartered in Dallas, Texas. If you would like to participate in the call, please dial 1-877-879-1183 or 1-412-902-6703, if calling internationally, approximately 15 minutes prior to the start of the call (access code: 5543896). Paul O'Donnell, Business Editor. After the merger, Callaway said its golf equipment will account for 30% of revenue and its apparel 24%, while Topgolf will represent 46% of revenue. Source: Created by Author with data from Yahoo Finance. 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. That doesnt include Callaways previous ownership stake. Accordingly, we have not provided a further reconciliation for long-term forecasted Adjusted EBITDAS to GAAP net income. I have no business relationship with any company whose stock is mentioned in this article. Both CEOs said golf equipment and golf entertainment venues have a chance to excel in the COVID-19 environment while other forms of entertainment have been severely restricted. Additionally, management believes there is opportunity for 450 venues worldwide so I would expect new venue openings to modestly ramp up in the future to an estimate of 108 by 2025. Its an all stock deal which gives Topgolf an implied equity value of ~$2 billion. Management uses such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate period-over-period comparisons and in forecasting the Company's business going forward. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. These selected companies were Dave & Buster's (PLAY), Live Nation (LYV), Drive Shack (DS), Cinemark (CNK), and Disney (DIS) who all have a component of in-person entertainment venues as a large part of their business. 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. 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 Callaways existing shareholders will own about 51.5% of the combined firm, with the remaining 48.5% going to Topgolfs own investors. MEMBERSHIP TERMS: If you choose a Lifetime Membership, you will pay a one-time charge of $5.00 where applicable, and you will be subject to the Terms and Conditions contained in this Agreement. Secondly, can Topgolf look up your membership? It is time and circumstance specific.. With the completion of the 9 new venues in 2021, Topgolf will have 70 venues operating for the entirety of 2022. 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. If you havent seen it, check it out its worth the read. GNN may earn a commission from sales generated by those links. 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. On top of the golf experience, Topgolf customers can order food and beverage which is then brought out to them at tables and outdoor furniture located just behind the bays, which are usually situated on three stacked levels. Topgolf has done a wonderful job of running its business and creating an experience that is putting golf clubs in peoples hands.. 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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. Zippia gives an in-depth look into the details of Topgolf, including salaries, political affiliations, employee data, and more, in order to inform job seekers about Topgolf. Upon arriving, he was immediately taken aback. Callaway projects the combined companys revenue will be $2.8 billion, based on fiscal year 2019 results. I never would have envisioned that it has become as popular as it is.. 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. 3 Morning Consult Polling, Published July 21, 2020 Each Topgolf location costs about $20 million We use the Golf News Net byline sometimes just to change things up. 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. 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. We are the subject of inquiries from the capital market world and our investors would look at it as a way to grow the company and get liquidity. Whats the bid for this rarest of Bugattis? You have to continue to reinvest in the experience.. Paul directs the work of an award-winning staff covering business news in the nation's fourth largest metro region. The part you didn't know? Both our golf equipment and soft goods businesses are recovering more quickly than we expected, and our third quarter projections reflect this momentum. 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. 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. Using management guidance, modest growth assumptions, and industry EBITDA multiples, the Topgolf business could be worth up to $4.3 billion by 2025. The number of shares to be issued is based upon an implied equity value of Topgolf of approximately $2 billion, including the 14% already owned by Callaway. 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.. In addition, these preliminary estimates are not necessarily indicative of the results to be achieved in any future period. Daily updates aggregating the stories and spin from more than 600 outlets across the globe. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. The deal is expected to close in early 2021. This means that Topgolf had 61 venues that were operating the entire year for an estimated revenue per venue around $21 million. 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. Topgolf Entertainment Group's platforms include Topgolf venues, Topgolf International, Toptracer, Topgolf Media and Topgolf Swing Suite. 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. I am not receiving compensation for it (other than from Seeking Alpha). 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.. Toptracer Range, a proprietary ball-tracking technology which is used by TV broadcasters and driving ranges across the country. 1 Golf Datatech industry report published September 21, 2020 Holding all other assumptions constant, Topgolf could be worth $17.9 billion and $95.91 per share if Callaway can effectively expand internationally. Brian Lynch Topgolf charges ~$160 per bay per month or $2,00 annually, Currently active in 7,500 bays worldwide, bringing in $15M in annual revenue. According to the release, Topgolf is in the early stages of a 10-year unit growth plan. And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. 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. a component of in-person entertainment venues as a large part of their business. Continued access to capital is a major priority if Topgolf is to continue its growth trajectory. More than two decades of archival stories, profiles, research and data. Callaway first invested in Topgolf in 2006, and the companies have maintained a strong partnership since, including an exclusive golf partnership agreement at all Topgolf venues. Whatever it has been doing has not been working. The preliminary estimates presented above are the responsibility of management and have been prepared in good faith on a consistent basis with prior periods. And it has plans or letters of intent to build another 33 facilities and designs on growing outside the United States through franchising. If you have an ad-blocker enabled you may be blocked from proceeding. Investors are cautioned not to place undue reliance on such preliminary estimates. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. Players can choose to compete in several Topgolf games in which players earn points based on how well they hit to specific targets. Itll be fun to see how creative Callaway gets in an attempt to funnel recreational driving range visitors into legitimate customers for their existing brand. We support credit card, debit card and PayPal payments. Want to find out the nearest Topgolf location to you? The deal, announced Tuesday, creates a company that can draw in non-golfers to Topgolfs entertainment venues and expose them to the broader game, said Callaway CEO Chip Brewer, whose company sells golf clubs, balls, apparel and other equipment. The company asked the city for $2.6 million in Topgolf)., You can read the full Callaway & Topgolf investor presentation, use JOE25 for 25% off your first order at. 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. Its whether the locations they are building are consistent so that there is a reason for people to come back more than once.. The connective PGA of America efforts include Topgolf holding sponsorship and media events, and other fan engagement efforts tied to PGA of America events along with Topgolf promoting the PGA Junior League Golf program. (1) Callaway Golf charges include: Non-recurring transaction and transition costs associated with the acquisition of Jack Wolfskin, including banker's fees, legal fees, consulting and travel expenses, audit fees and valuations services, as well as non-cash charges related to the valuation of acquired inventory, in addition to other non-recurring advisory fees. Topgolf has 6,761 employees, and the revenue per employee ratio is $32,539. Are the people drawn to the social nature of Topgolf really likely to consistently play 18 at the local club? They are building are consistent so that there is a major priority if Topgolf is in the stages... 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