Our track record of creativity and diversity of offerings will only grow stronger as part of Callaway, a global leader in the industry, said Erik Anderson, executive chairman of Topgolf. offers FT membership to read for free. Every morning I write an email discussing the business and money behind sports. Goldman Sachs & Co. LLC served as the financial advisor to Callaway and Latham & Watkins LLP served as legal counsel. Please disable your ad-blocker and refresh. 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. The deal is expected to close in early 2021. We dont rule it out, Anderson said of the possibility of going public. 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. Daily updates aggregating the stories and spin from more than 600 outlets across the globe. Topgolf will continue to operate from its headquarters in Dallas, Texas. 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. We value who they reach and their diversity.. Non-GAAP Reconciliation and Supplemental Financial Information, Non-recurring and non-cash charges, before taxes(1). This means that Topgolf had 61 venues that were operating the entire year for an estimated revenue per venue around $21 million. 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. Therefore, adjusted revenue and EBITDA numbers for the full-year 2021 would be around $1.3 billion and $190 million. The challenge is balancing Topgolfs position as a young, hip, social scene geared to drinking, eating and meeting people with the golf groups interest in growing the game. The Dallas company has grown at a 30 percent compound annual rate since 2017 and recorded $1.06 billion in sales last year with a net loss of $114.9 million. 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. We are excited to support their continued growth as a united company., Financial Benefits and Transaction Structure. Accordingly, we have not provided a further reconciliation for long-term forecasted Adjusted EBITDAS to GAAP net income. 7 Topgolf Net Debt includes $152 million of Deemed Landlord Financing and $152 million of Cash, About Topgolf Entertainment Group Topgolf Entertainment Group is a global sports and entertainment community that connects nearly 100 million fans in meaningful ways through the experiences we create, the innovation we champion and the good that we do. Topgolf International's annual revenues are over $500 million (see exact revenue data) and has over 1,000 employees. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. Drive Shack, backed by TaylorMade, this spring is set to debut its first golf/entertainment facility in Orlando with a three-story driving range that, like Topgolf, will offer a bar and restaurant experience. He previously worked as a business journalist for the Orlando Sentinel, Tulsa World and The Monitor in McAllen. My name is Kyle Repar. Get the latest business insights from Dun & Bradstreet. 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. Additionally, EBITDA margin and average revenue per venue must stay constant with 2021's figures for these valuations to become realized. In addition, these preliminary estimates are not necessarily indicative of the results to be achieved in any future period. 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. 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. 108 total venues for the full year in 2025 leads to projected revenue of $2.3 billion and $336 million of EBITDA. Topgolfs chairman, Erik Anderson, will take a spot on Callaways board of directors as vice chairman, joined by two other Topgolf directors. The golf industry as a whole has been on a growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. Revenue at golf courses and clubs improved from $29.9 billion in 2011 to Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Each Topgolf location costs about $20 million to build, and these locations have typically paid for themselves in two years. Topgolf is a high-value experience for a seasoned golfer and it is fun and unintimidating for the unseasoned golfer or someone who is not a golfer. Tech entrepreneur Ryan Smith purchased a majority stake in the Utah Jazz yesterday, which values the team at $1.6 billion. Check if your There is also competition entering the market. Topgolf projects adding more than 3,500 bays in 2020, and around 8,000 new bays per year starting in 2022. Post-merger, Callaway projects Toptracer to be a $200M business within ~10 years. He's been The News' business editor since 2015. Others see Topgolfs fast growth and fully expect the company to eventually become public. (2) Represents the non-cash amortization of the debt discount on the convertible notes issued in May 2020. Topgolf venues overall averaged more than 35,000 customer visits per day last year, with the average customer spending two hours per visit at a venue, according to the company. 4 Based on 2022 projections
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. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Callaway and Topgolf, including the anticipated operations, financial position, liquidity, performance, prospects or growth and scale opportunities of Callaway, Topgolf or the combined company, the strategies, prospects, plans, expectations or objectives of management of Callaway or Topgolf for future operations of the combined company, any statements regarding the approval and closing of the merger, including the need for stockholder approval and the satisfaction of closing conditions, and statements of belief and any statement of assumptions underlying any of the foregoing. In addition, the Company's independent registered public accounting firm has not audited this information or completed its quarterly review procedures for the quarter ended September 30, 2020 and does not express an opinion or any other form of assurance with respect to these preliminary estimates or their achievability. 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. His family bootstrapped their business from their basement to an $8 billion acquisition, turning down $500M cash in the process. As a result, investors should exercise caution in relying on this information and should not draw any inferences from this information regarding financial or operating data not provided. Kara Barry
Premium access for businesses and educational institutions. 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, in addition to tapping into golf as a property, has seen their growth based in providing great experiences both in their venues and outside.. 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. invrelations@callawaygolf.com, For Topgolf:
Another literal connective effort is Topgolfs latest plan to build a new venue on the site of a West Palm Beach, Fla., public golf course. Topgolf garnered an investment from Callaway in 2006 and expanded to the United States, now the primary market for the company. Athletic's got you covered. GNN may earn a commission from sales generated by those links. 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. We use the Golf News Net byline sometimes just to change things up. All rights reserved. Access to easy-to-read digital editions of weekly issues. Disclosure: I/we have a beneficial long position in the shares of ELY either through stock ownership, options, or other derivatives. Gambling problem? We see a lot of ways with golf to have a meaningful business, said Erik Anderson, executive chairman of Topgolf Entertainment. According to Axios, 1834 year olds represent 25% of on-course golfers, but 40% of the 9.9 million off-course golfers (i.e. For the full-year, same-venue sales were approximately 95 percent of 2019 levels. Callaways existing shareholders will own about 51.5% of the combined firm, with the remaining 48.5% going to Topgolfs own investors. The employee data is based on information from people who have self-reported their past or current employments at Topgolf. 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.. Please. Callaway and Topgolf both delivered strong financial results immediately before the COVID pandemic and have since recovered ahead of expectations. The early data is encouraging about participants going from Topgolf to the course. What do legacy golf companies like Callaway plan to do about it? 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. The company is headquartered in Dallas, Texas. 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. (760) 931-1771
We use Topgolf venues overall averaged more than 35,000 customer visits per day last year, with the average customer spending two hours per visit at a venue, according It is all about having great experiences and sharing it. Why did Callaway buy Topgolf? The proposed expansion of the non-essential goods tax, which would see luxury good items taxed more, would generate st least P12.4 billion in annual revenue that could be funneled into supporting the local creative industry, Albay 2nd District Joey Salceda said on Wednesday, Jan. 18. I have no business relationship with any company whose stock is mentioned in this article. 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. Check out how Callaways annual revenue has responded (Source): Which brings me to my next point Callaway is doubling down on diversification. Being the good friend I am, I read it so you dont have to lets run through it. Using management guidance, modest growth assumptions, and industry EBITDA multiples, the Topgolf business could be worth up to $4.3 billion by 2025. Just for fun, lets look at a potential valuation if management lives up to their expectation of 450 total venues worldwide over the next 20 years. It's been proclaimed the most exciting two minutes in sports. Topgolf currently has 28 open locations in the United States, with another dozen opening soon all over the place. It starts with the fact that the millennial audience is largely focused on experiences, Horne said. 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. 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. Non-recurring costs and non-cash charges, before taxes (1). Topgolf has 6,761 employees, and the revenue per employee ratio is $32,539. If you would like to receive it directly in your inbox, subscribe now. 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. And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. Callaway will assume approximately $555 million in net debt with Topgolf. 2023 Leaders Group. 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. The expansion is boosting the number of Topgolf customers, but Anderson declined to comment on the specific customer return rate. Compare Standard and Premium Digital here. Topgolf is very much in a high-growth phase right now, Brewer said. https://www.sportsbusinessjournal.com/Journal/Issues/2018/04/02/In-Depth/Topgolf.aspx. None of the information on this page has been provided or approved by Topgolf. It is making sure their brand is protected and really stands for something. If you have an ad-blocker enabled you may be blocked from proceeding. Timely, daily updates provide the latest developments and news relied upon by industry leaders. What is exciting is the belief that they can be LPGA viewers or on-site fans. I find it hard to believe that acquisitions will allow it to buy its way out of a secular decline in golf participation. While the company is expanding, it lacks a large presence in the Northeast and in Southern California, with no current facilities in Los Angeles or San Diego. Morgan Stanley & Co. LLC and J.P. Morgan served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to Topgolf. The report, which assessed the industry in 2016, found that golf is showing growth overall. CARLSBAD, CA and DALLAS, TX October 27, 2020 Callaway (NYSE:ELY) and Topgolf Entertainment Group (Topgolf) today announced that the companies have entered into a definitive merger agreement. Heres a good look at the economics of an average Topgolf location: In addition to unique physical locations, which currently drive almost all of Topgolfs $1.1 billion in annual revenue, Topgolf is also building out a significant technology component of their business. 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.. The number of shares issued is also based upon a fixed price of Callaway common stock of $19.40 per share. I wrote this article myself, and it expresses my own opinions. Chip Brewer will continue to lead the combined company as President and Chief Executive Officer. So far, the companys success has been based on its reputation for innovation in a fun environment. The data presented on this page does not represent the view of Topgolf and its employees or that of Zippia. 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? With the completion of the 9 new venues in 2021, Topgolf will have 70 venues operating for the entirety of 2022. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. 2023 Leaders Group. Topgolf began looking at an initial public offering in 2019. 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