Five years after agreeing to acquire Topgolf for $2 billion, Callaway is selling a 60% stake in the business to private equity firm Leonard Green & Partners.
Callaway will maintain a 40% minority stake in Topgolf, but the deal is being finalised at an enterprise value of $1.1 billion — representing a 45% drop in value from Callaway’s 2020 purchase price.
Leonard Green, whose portfolio also includes Crunch Fitness and Authentic Brands Group, a holding company that owns Reebok and Champion — already held a 4.9% interest in Topgolf Callaway Brands. That entity will cease to exist; Callaway Golf Company will be the new name for Callaway, which will stand alone as a golf equipment and apparel manufacturer and remain publicly traded on the New York Stock Exchange.
As of the end of last year, Topgolf owned and operated 100 venues, with 96 of them in the US and four in the U.K.
The $1.1 billion valuation reflects Topgolf’s struggles since the 2020 merger, which valued Topgolf at about $2 billion. Topgolf’s post-merger momentum was buoyed by the pandemic-era golf boom, but that surge has since faded, and in September last year Topgolf Callaway announced plans to separate into two independent companies. While a spin-off was considered the most likely path, other options were also being explored, with the deal with Leonard Green being the preferred option by Callaway’s management team.
In a company statement issued after the announcement of the partial sale, Topgolf Callaway president and CEO Chip Brewer said that after undergoing a “thorough evaluation of a range of alternatives, we believe this sale is the best outcome for our shareholders, as well as our employees and other stakeholders.”
Brewer will continue to lead Callaway Golf Company once the deal is completed, which is expected to be in the first quarter of next year.