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Callaway announces huge all-stock merger deal with Topgolf

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Callaway Golf has announced an all-stock merger agreement with TopGolf with the number of shares to be issued based upon an implied equity value of Topgolf of approximately $2 billion – including the 14% already owned by Callaway.

Callaway first invested in the golf entertainment company, Topgolf, back in 2006 entering an exclusive golf partnership agreement at all Topgolf venues.

 

On the new deal expected to be completed in early 2021, Chip Brewer, President and Chief Executive Officer of Callaway said that the all-stock merger between the two can create “an unrivaled golf and entertainment business”.

“Together, Callaway and Topgolf create an unrivaled golf and entertainment business. This combination unites proven leaders with a shared passion for delivering exceptional golf experiences for all from elite touring professionals to new and aspiring entrants to the game. We’ve 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.”

Under the terms of the merger agreement, Callaway will issue approximately 90 million shares of its common stock to the shareholders of Topgolf, excluding Callaway, which currently holds approximately 14% of Topgolf’s outstanding shares. Upon completion of the merger, Callaway shareholders will own approximately 51.5%, and Topgolf shareholders (excluding Callaway) will own about 48.5% of the combined company on a fully diluted basis.

Topgolf’s revenue for 2019 was approximately $1.1 billion, and the company currently has 63 locations worldwide, including 58 in the U.S., and has more than 23 million customers. Find out all about Topgolf here.

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Gianni is the Managing Editor at GolfWRX. He can be contacted at [email protected].

5 Comments

5 Comments

  1. Mike

    Oct 30, 2020 at 3:11 pm

    This is kind of hilarious. Other than them both being golf companies there really aren’t a lot of synergies here. Terrible move for Callaway to be honest. Watch for their stock price to sink like a rock even further.

    They think there’s big growth in these TopTracer products to sell to driving ranges, when the reality is personal launch monitors have become so cheap that hardcore golfers don’t need top tracer. A team of two guys in South Africa just created a pretty decent phone app that is a launch monitor.

    Topgolf’s are franchised, so at least they don’t have all of the carrying costs on their books but I think TopGolf will come back much slower than real golf–which is obviously booming.

    • Rascal

      Oct 30, 2020 at 5:50 pm

      You didn’t have to wait long, ELY tanked big time only a day after the announcement.

  2. Find it, Cut it

    Oct 28, 2020 at 5:29 pm

    Fairly appropriate. TopGolf is a golf-approximation entertainment company.

    And so is Callaway.

  3. Edward Bardoe

    Oct 28, 2020 at 9:44 am

    I loved the picture Golf channel.com used to illustrate the story, a barefoot drunk swinging away. Should rename the company “not golf”. Mostly a real estate play.

  4. Mark

    Oct 28, 2020 at 7:42 am

    I love the hyperbole viz. “…the company currently has 63 locations worldwide, including 58 in the U.S.”: barely a worldwide operation with 92% of your locations in one country.

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Equipment

Spotted: Tony Finau’s driver shaft change at the 2024 Texas Children’s Houston Open

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Tony Finau has always been known as one of the longest players on the PGA Tour, but he has recently been working on adding a little more distance. Last year, Finau averaged 118.3 mph club head speed and 178.08 mph ball speed, all while playing a Mitsubishi Diamana D+ Limited 70 TX driver shaft. This year, he has increased his club head speed to 123.93 mph and his ball speed to 183.32 mph.

However, Finau’s overall distance has decreased by two yards in that time. From a fitting perspective, something was amiss. We asked Tony about the shaft change at the Texas Children’s Hospital Open.

“[I’m seeing] better numbers with the spin. My driver’s been a little high spin for me over the last month or so, and so I just figured it was time to probably check out the equipment,” Finau said. “And it definitely showed me that I was using a shaft that’s maybe a little too tip-stiff for me, the way I load the club now. [I’m seeing] better numbers with the spin.”

Finau switched from the Mitsubishi Diamana D+ Limited 70 TX into the Diamana GT 70 TX. The newer Diamana GT has a slightly different profile than the D+ Limited with the stiffest handle section in the Diamana lineup. The mid sections between the two are similar stiffness but the tip is just slightly stiffer in the Diamana GT. Both shafts are within one gram of each other in the 70 TX. The torque rating on the GT is 0.1 higher than the D+Limited’s 2.7 measurement.

Mitsubishi lists the Diamana GT as a shaft between the mid-launching Diamana TB and the new low-launch Diamana WB shafts. For most players, it would be considered a mid/low launch and low-spin shaft option. Mitsubishi’s Xlink Tech Resin System makes sure the maximum carbon fiber content is there for smooth feel without reducing the strength of the shaft. MR70 carbon fiber is used for reinforcing the shaft and boron is used in the tip for its high strength and compression properties.

Finau is still using his trusty Ping G430 LST driver in 9 degrees and has the adjustable hosel set to -1 degree of loft (standard lie angle). Finau’s long-time favorite Lamkin UTX Green grip is installed. He definitely has a few extra wraps of tape under that grip as you can see the bulge down where the grip meets the shaft.

One final note: Per Ping’s PGA Tour rep Kenton Oates, Finau’s driver is also adjusted to play one degree upright to help dial in his desired launch.

We’ll see how he fares with the new setup this week in Houston!

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Whats in the Bag

Zac Blair WITB 2024 (March)

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Driver: Titleist TSR2 (10 degrees, A1 SureFit setting)
Shaft: Fujikura Ventus TR Red 6 X

3-wood: TaylorMade M5 Rocket 3 (14 degrees)
Shaft: Fujikura Speeder 757 Evolution V1 X

Utility: Titleist U510 (3)
Shaft: Aldila Tour Blue 85 X

Irons: Ping i210 (4-6), Miura MB-001 (7-9)
Shafts: Nippon N.S. Pro Modus3

Wedges: Titleist Vokey Design SM10 (46-10F, 58-08M @57, 60 @61), Vokey Design WedgeWorks (52-M)
Shafts: Nippon N.S. Pro Modus3 Tour 105 X

Putter: Scotty Cameron prototype

Grips: Golf Pride Tour Velvet

Ball: Titleist Pro V1

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Whats in the Bag

Martin Trainer WITB 2024 (March)

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Driver: Wilson Staff Staff Model (6.5 degrees)
Shaft: Mitsubishi Kai’li Blue 70 TX

3-wood: Wilson Staff WLabs Prototype (13 degrees)
Shaft: Mitsubishi Tensei CK Orange 80 TX

Irons: Wilson Staff Staff Model (2, 4-9)
Shafts: True Temper Dynamic Gold Tour Issue X100

Wedges: Wilson Staff Staff Model (52, 56, 60)
Shafts: True Temper Dynamic Gold Tour Issue X100

Putter: Bobby Grace Greg Chalmers Prototype

Grips: Golf Pride Tour Velvet

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