If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. 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. For a full comparison of Standard and Premium Digital, click here. Each Topgolf location costs about $20 million to build, and these locations have typically paid for themselves in two years. Callaway will host a conference call today, October 27th, at 5:30 p.m. Eastern time to discuss this transaction. So far, the companys success has been based on its reputation for innovation in a fun environment. The Company has provided reconciling information in the attached schedules. 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. Topgolf generated approximately $1.1 billion in revenue in 2019 and has grown at a 30% compound annual rate since 2017. 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. 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. 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. 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. Accordingly, we have not provided a further reconciliation of EBITDAS to GAAP net income. 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. At Athletic Brewing, they're all about re-imagining beer for the modern adult. A live webcast of the conference call and downloadable slides will be available online at: https://ir.callawaygolf.com. 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. With the completion of the 9 new venues in 2021, Topgolf will have 70 venues operating for the entirety of 2022. Its not exactly clear yet, but id expect more of the same. A lot of growth.. Topgolf revenue is $220.0M annually. 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. Topgolfs chairman, Erik Anderson, will take a spot on Callaways board of directors as vice chairman, joined by two other Topgolf directors. Topgolf has 6,761 employees, and the revenue per employee ratio is $32,539. 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. invrelations@callawaygolf.com, For Topgolf: 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.. Remaining privately-owned during those two decades, the company built locations in every region of the country. SBJ I Factor presented by Allied Sports features an interview with Orlando Magic CEO Alex Martins. Topgolf has achieved rapid growth and strong customer engagement since its founding in 2000, driven by several platforms, including: Since its inception, Topgolf has created an innovative, tech-inspired twist on the golf driving range experience, turning it into a global entertainment and sports movement. 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. 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. 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%. Kara Barry I find it hard to believe that acquisitions will allow it to buy its way out of a secular decline in golf participation. That is why we are so focused on content and experience.. 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). 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 (. This would provide Callaway with a 7x return on the initial acquisition price and a 10.13% CAGR. After extensive research and analysis, Zippia's data science team found the following key financial metrics. 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. It is time and circumstance specific.. Continued access to capital is a major priority if Topgolf is to continue its growth trajectory. My guess is they go public in the next three years. 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? During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. Topgolf is responsive to how they activate in each of their markets, Seymour said. 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. 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. 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. As part of the agreement, Callaway will issue 90 million shares of its common stock to 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. I am incredibly bullish on it, said Jeff Price, chief commercial officer for the PGA of America. Please disable your ad-blocker and refresh. Callaways reach in the golf world also gives Topgolf an inside track on selling its ball-tracing technology to courses and driving ranges, Berle said. 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. 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. You have 2 All Access articles remaining this month. Due to the constant popularity of Topgolf venues as well as the sport, I believe locations will continue to report exceptional revenues. Is this happening to you frequently? 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. Standard Digital includes access to a wealth of global news, analysis and expert opinion. I wrote this article myself, and it expresses my own opinions. After extensive research and analysis, Zippia's data science team found the following key financial metrics. Dr Pepper flavored Peeps arrive in Texas soon. 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. https://huddleup.substack.com/p/callaway-and-topgolf-breaking-down However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. 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. press@topgolf.com, Additional Information and Where You Can Find It. More than half of Topgolfs customers identify themselves as non-golfers, giving Callaway early exposure to potential golfers. Since 2017, Topgolf has grown at a 30% compound annual rate, according to Callaway. 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. 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. Callaway is issuing about 90M shares to facilitate the merger stock is down about 20% in response. Chip Brewer will continue to lead the combined company as President and Chief Executive Officer. And for Topgolf, despite its current success, how does it continue to scale and generate repeat visitors? 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. Keep abreast of significant corporate, financial and political developments around the world. Investors are cautioned not to place undue reliance on such preliminary estimates. 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. Their CEOs explain the strat Callaway has invested in Topgolf twice already, in 2006 and 2018, amounting to an existing ownership stake of about 14%. City Council voted 4-3 to allocate the remaining $6 million in STAR bond revenue to the Topgolf project. Paul O'Donnell, Business Editor. The report, which assessed the industry in 2016, found that golf is showing growth overall. 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. Both our golf equipment and soft goods businesses are recovering more quickly than we expected, and our third quarter projections reflect this momentum. WebAbout Topgolf Entertainment Group Topgolf Entertainment Group is a technology-enabled global sports and entertainment community that connects people in meaningful ways 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. Topgolf has done a wonderful job of running its business and creating an experience that is putting golf clubs in peoples hands.. Callaway will assume Topgolfs net debt, which is estimated to be $555 million at closing7, resulting in an estimated enterprise value for Topgolf of approximately $2.5 billion. 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. 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. Check if your By Register for a free SBJ account to unlock one extra article per month. 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). (4) Represents certain non-recurring costs, including costs associated with the acquisition of Jack Wolfskin. 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. Topgolfs adjusted EBITDA amount of $189.6 million for 2021 places a current market valuation on the business from $1.6 billion to $2.4 billion and a per share value of $8.36 to $13.00. Being the good friend I am, I read it so you dont have to lets run through it. Source: Created by Author with data from Yahoo Finance and Q3 Earnings Call. Premium access for businesses and educational institutions. Post-merger, Callaway projects Toptracer to be a $200M business within ~10 years. We also occasionally include links to products and services from merchants of our choice. 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. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many users needs. Its an all stock deal which gives Topgolf an implied equity value of ~$2 billion. I am not receiving compensation for it (other than from Seeking Alpha). 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. Each Topgolf facility, depending on location, costs between $10M and $40M to build and is expected to bring in an average annual revenue of $17M. 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. I wondered if I could even get a bay.. Fueled by a tremendous team of associates and a diverse offering across our venues, Toptracer, and media platform, Topgolf is truly changing the landscape of the industry by making golf more inclusive and accessible to people of all ages, demographics and skill levels. 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. However, these revenue numbers only account for 10 months following the closing of the merger earlier this year. 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). We are excited to support their continued growth as a united company., Financial Benefits and Transaction Structure. 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. 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 see a lot of ways with golf to have a meaningful business, said Erik Anderson, executive chairman of Topgolf Entertainment. Its whether the locations they are building are consistent so that there is a reason for people to come back more than once.. Non-recurring costs and non-cash charges, before taxes (1). 2023 Leaders Group. It is classified as operating in the Arts, Calloway's stock is at the same price as it was in 1998. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. I wrote this article myself, and it expresses my own opinions. It was a Tuesday and it was packed, Whan remembers. Get the latest business insights from Dun & Bradstreet. Please. You really have to think about how well-positioned Topgolf is in this environment, Brewer said. https://www.ft.com/content/a3573b9e-dca8-11e5-8541-00fb33bdf038 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. According to Axios, 1834 year olds represent 25% of on-course golfers, but 40% of the 9.9 million off-course golfers (i.e. Young people are fickle. WebFounded in 2000, Topgolf is a sports entertainment facility that features hitting bays, a restaurant, and a bar. Callaway and Topgolf both delivered strong financial results immediately before the COVID pandemic and have since recovered ahead of expectations. You can read the full Callaway & Topgolf investor presentation here. We support credit card, debit card and PayPal payments. cookies We are not nave to say we would never look at it. I never would have envisioned that it has become as popular as it is.. A replay will be made available online approximately three hours following the live call and will remain available through October 27, 2021. 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. 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.. 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 part you didn't know? Topgolf peak revenue was $220.0M in 2021. Even with the dizzying ascent of the company, Topgolf faces challenges with its growth and expansion. The data on this page is also based on data sources collected from public and open data sources on the Internet and other locations, as well as proprietary data we licensed from other companies. 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. If you would like to receive it directly in your inbox, subscribe now. 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. Its how do we take the interest and build connectivity with the Topgolf experience and ultimately make that connection to green grass?. Topgolf is a global sports entertainment community headquartered in Dallas, Texas with locations in the United States, United Kingdom, and Australia. There are currently 58 Topgolf locations, 53 in the United States, 3 in the United Kingdom, and one in Australia. Cost of opening one TopGolf franchise is around Us $18 million. 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. Daily updates aggregating the stories and spin from more than 600 outlets across the globe. Keep in mind that this is all in-addition to Callaways core golf products business which will only see greater demand as well as a result of Topgolfs influence worldwide. Diluted earnings (loss) per share:. (1) Represents amortization expense of intangible assets from the acquisitions of OGIO, TravisMathew and Jack Wolfskin.
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