Callaway and Top Golf Merger

[DallasHorn26 586]

Quote

Callaway Golf is one of the biggest and most well-respected golf equipment makers in the world. Topgolf has established itself as a brand that successfully combines technology, entertainment and sports, attracting golfers and non-golfers alike to its 58 locations across America.

On Tuesday evening, it was announced that the two companies are merging.

“Together, Callaway and Topgolf create an unrivaled golf and entertainment business,” said Chip Brewer, president and CEO of Callaway, in a release. “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.”

Brewer will run the combined company after the completion of the merger. Dolf Berle, Topgolf’s current CEO, will continue to lead the Topgolf business through the transitional period, then step down and leave the company.

Topgolf will join Ogio, Travis Mathew and Jack Wolfskin under the Callaway brand.

 

Callaway made its first investment in Topgolf in 2006 and already owned 14 percent of the company. The transaction announced on Tuesday is an all-stock deal. Callaway will issue approximately 90 million shares of its common stock to non-Callaway shareholders of Topgolf based upon an implied equity value of Topgolf of $1.986 billion.

Many people’s first exposure to golf has been at a Topgolf venue, attracted by the nightclub-like atmosphere, food and drinks, high-tech games and non-competitive environment. During a conference call on Tuesday evening, Berle said all Topgolf venues in the United States had re-opened by early September. Recent operating sales are back to 80-85 percent of 2019 same-location sales. He added that 33 new venues are in the planning stages and sees approximately 200 possible locations for Topgolf venues in the United States.

Topgolf not only owns 58 locations in the United States, but it also owns Toptracer. This technology is used during television broadcasts to allow viewers to follow balls as they fly through the air. That technology is also being rolled out at driving ranges in the form of Toptracer Range, allowing golfers to see their shots’ ball flight as they practice on screens, smartphones or tablets.

Brewer said that Topgolf is ideally suited to operate within the challenges COVID-19 pandemic during the conference call. Hitting bays are spaced far apart, usually with physical barriers between groups.

Topgolf was especially attractive to Callaway because, according to Topgolf, there were 23 million visits to Topgolf venues in 2019. Fifty-one percent of the people who went to a Topgolf facility last year identified themselves as a non-golfer, but 75 percent of those people said that after visiting Topgolf, they were interested in playing golf on a course. If Callaway can develop a relationship with people as they are discovering the game and learning to love it, it has a better chance of turning those people into Callaway, Odyssey, Ogio and Travis Mathew loyalists.

The merger is expected to be finalized in early 2021.

Another article I read said they will maintain the Dallas based headquarters. I also read somewhere that one of the first ranges they built was the Dallas location. 

 

Edited October 28, 2020 by DallasHorn26

[UTPhil2006 3807]

Seems like a good fit 

[TwiceHorn 31490]

If it weren't for Callaway's early investment, I'd be pretty suspicious.

Selling golf gear and running  what is essentially an entertainment venue are not at all similar businesses, other than the golf "link."

[Guest Lobo]

58 minutes ago, TwiceHorn said:

other than the golf "link."

"Golf" clap for the pun.  

Nice to see some good business news finally.  Not sure how in the in-house captive sales model is gonna go.  Most of the times I've been there, the drunken douchebags I see are looking to buy some shit, but it ain't golf equipment.  

[Native Horn 3504]

Sweet.  Hope they provide Big Berthas for the casual golfers.  #doubtful

[TwiceHorn 31490]

10 minutes ago, Native Horn said:

Sweet.  Hope they provide Big Berthas for the casual golfers.  #doubtful

There would certainly be some great opportunities for product placement at Top Golf to sell the shit out of Callaway gear to noobs and veteran duffers alike.  That part makes perfect sense.

But it isn't necessary to buy Top Golf to achieve that.  And, it may be foolish to dismiss the Top Golf CEO (I assume a lot of their c-suite is going too).

"We'll see."/gust avrokotos

[Brisketexan 105154]

Back in the day, based on the demographics and models for business success in the Houston area, my friends wanted to open a topless driving range, serving booze, a lot like Top Golf....but with strippers.  They wanted to call it "Tits and Tees."

Seems like the idea is still viable.

[CooterBrown 18014]

The CEO, Dolf Berle, is a friend of a friend.  Hung out with him a couple of times. Interesting dude. A South African who went to college in Zimbabwe and at Harvard. He's ran a ton of companies like House of Blues.

 

[Reagan1k 3024]

I can see this from a vertical integration standpoint.  Long term, I'm sure Callaway is thinking that if the demand for their gear is only tied to the 18 hole golfer, then that market is flat to falling.

Research has indicated that things like work and family responsibilities are making it harder for the average person to dedicate the time to regularly playing a traditional round of golf.

"Dad's" don't leave every Saturday morning at 9am and then meet the family for dinner at the club after playing 18 holes and then cards in the locker room.

TopGolf gives Callaway a backdoor entrance into the main growth category in the industry, the aforementioned cross selling of product, and an immediate "in" with those consumers who's 1st and likely only introduction to the sport would be at a TopGolf facility...whether that be the standard model or a TopTracer range. 

Makes a lot of sense to me and considering they've been an investing partner for 10-15 years already, the synergy seems fairly natural.

 

[DonkeyCigars 143]

2 hours ago, CooterBrown said:

The CEO, Dolf Berle, is a friend of a friend.  Hung out with him a couple of times. Interesting dude. A South African who went to college in Zimbabwe and at Harvard. He's ran a ton of companies like House of Blues.

 

I know him well and did some deals with him when he ran Dave & Busters.

I work very closely with Infogain to do some stuff with TG and heard this was coming, interesting exit from Private Equity for TG especially with all the hype I was hearing of their new concept, which was shut down during Covid, called PuttShack or something as a mini-golf reimagination and treatment.

Edited October 29, 2020 by DonkeyCigars

[texasjacket 289]

18 hours ago, Brisketexan said:

Back in the day, based on the demographics and models for business success in the Houston area, my friends wanted to open a topless driving range, serving booze, a lot like Top Golf....but with strippers.  They wanted to call it "Tits and Tees."

Seems like the idea is still viable.

Are the strippers the ones hitting?

[RollLeft 5045]

20 hours ago, Brisketexan said:

Back in the day, based on the demographics and models for business success in the Houston area, my friends wanted to open a topless driving range, serving booze, a lot like Top Golf....but with strippers.  They wanted to call it "Tits and Tees."

Seems like the idea is still viable.

Coke/Pepsi, Hooters/TPeaks, TopGolf/TT's.  I think so.  

[capnamerca 571]

On 10/29/2020 at 2:40 PM, DonkeyCigars said:

I know him well and did some deals with him when he ran Dave & Busters.

I work very closely with Infogain to do some stuff with TG and heard this was coming, interesting exit from Private Equity for TG especially with all the hype I was hearing of their new concept, which was shut down during Covid, called PuttShack or something as a mini-golf reimagination and treatment.

I"d pay well to be able to play legit mini-golf in a topgolf-like setting. Well-maintained turf, holes laid out in a realistic way, games that can match golfers and non-golfers (like the OG topgolf product). Find a way to capture the "expansive putting course / 19th hole" feel from places like Pinehurst (the Cradle) and Bandon (the punchbowl), and it could work. I'm not sure how to run the business, but I'd pay for a quality experience for certain.

[BradInATX 9208]

I"d pay well to be able to play legit mini-golf in a topgolf-like setting. Well-maintained turf, holes laid out in a realistic way, games that can match golfers and non-golfers (like the OG topgolf product). Find a way to capture the "expansive putting course / 19th hole" feel from places like Pinehurst (the Cradle) and Bandon (the punchbowl), and it could work. I'm not sure how to run the business, but I'd pay for a quality experience for certain.

Horseshoe Bay has a nice putting course like you're talking about. Good for nighttime degenerate gambling and drinking.

[DonkeyCigars 143]

The first one opened in London recently. It looks more like high-tech pinball (has the microchip ball, like TG): https://www.bunkered.co.uk/golf-news/incredible-new-putting-facility-to-open-in-london-this-month

 Say hello to Puttshack, the new kid on the mini golf block. 

 

Described as the ‘world’s first super tech indoor mini golf experience’, Puttshack is set to open this month at Westfield London. 

Sprawling across 20,000sq/ft, this innovative food, drink and technology concept is the brainchild of the masterminds behind pioneering ping-pong venue Bounce and the global golf phenomenon TopGolf. So it can’t possibly fail, right?

[HornsOverIthaca 2333]

On 10/29/2020 at 10:48 AM, Brisketexan said:

Back in the day, based on the demographics and models for business success in the Houston area, my friends wanted to open a topless driving range, serving booze, a lot like Top Golf....but with strippers.  They wanted to call it "Tits and Tees."

Seems like the idea is still viable.

If it was the 70s or 80s, entrance would only be approved to those with an appropriate mustache.

[Incredulity 11675]

The Punchbowl at Bandon is awesome, but it is a drunken dudefest that I would be extremely reticent to set up in a place that catered to the general population.  Frankly, it’s surprising to me there weren’t  confrontations based on the lack of formal structure and booze consumption.  My only guess is the $$$ involved in the trip keeps people in line somewhat.

[Gravy Train 974]

On 10/29/2020 at 2:40 PM, DonkeyCigars said:

I know him well and did some deals with him when he ran Dave & Busters.

I work very closely with Infogain to do some stuff with TG and heard this was coming, interesting exit from Private Equity for TG especially with all the hype I was hearing of their new concept, which was shut down during Covid, called PuttShack or something as a mini-golf reimagination and treatment.

PuttShack isn't tied to TG at all aside from the Joliffe's who started the TG concept.  I'm a former TG leader from the good 'ole days (2012-2017) before Dolf came in.  That feeling/culture/story wasn't bound to last forever and I put a lot of skins on the wall to develop the brand that never paid off for me.

Covid did a number on TG's valuation, good on Callaway for picking up the rest of business.  It's far short of the $4B IPO that was once speculated and the squeeze (in this segment) will persist.

[VolenteHawk 495]

On 10/31/2020 at 6:49 AM, BradInATX said:

On 10/30/2020 at 11:15 PM, capnamerca said:

I"d pay well to be able to play legit mini-golf in a topgolf-like setting. Well-maintained turf, holes laid out in a realistic way, games that can match golfers and non-golfers (like the OG topgolf product). Find a way to capture the "expansive putting course / 19th hole" feel from places like Pinehurst (the Cradle) and Bandon (the punchbowl), and it could work. I'm not sure how to run the business, but I'd pay for a quality experience for certain.

Horseshoe Bay has a nice putting course like you're talking about. Good for nighttime degenerate gambling and drinking.

And real grass.

[capnamerca 571]

2 hours ago, VolenteHawk said:

And real grass.

real grass would never work at TopGolf, but I'd love to see someplace with a decent amount of land try it - maybe Clay/Kizer, who already have lights in place, and a short course requiring maintenance. They could take the last ~20 yards of the range, and bulldoze the fake practice green on the short course. Together you could put 12-14 really good holes on a meandering, real-grass putting green complex.  Charge me $20 for unlimited play, $10 for an hour.

[VolenteHawk 495]

1 hour ago, capnamerca said:

real grass would never work at TopGolf, but I'd love to see someplace with a decent amount of land try it - maybe Clay/Kizer, who already have lights in place, and a short course requiring maintenance. They could take the last ~20 yards of the range, and bulldoze the fake practice green on the short course. Together you could put 12-14 really good holes on a meandering, real-grass putting green complex.  Charge me $20 for unlimited play, $10 for an hour.

Oh yeah, no chance at a Top Golf concept...I meant the Horseshoe Bay course.

[BradInATX 9208]

real grass would never work at TopGolf, but I'd love to see someplace with a decent amount of land try it - maybe Clay/Kizer, who already have lights in place, and a short course requiring maintenance. They could take the last ~20 yards of the range, and bulldoze the fake practice green on the short course. Together you could put 12-14 really good holes on a meandering, real-grass putting green complex.  Charge me $20 for unlimited play, $10 for an hour.

My vote would be that they bulldoze #18 on clay for the putting course

[capnamerca 571]

1 hour ago, BradInATX said:

3 hours ago, capnamerca said:

real grass would never work at TopGolf, but I'd love to see someplace with a decent amount of land try it - maybe Clay/Kizer, who already have lights in place, and a short course requiring maintenance. They could take the last ~20 yards of the range, and bulldoze the fake practice green on the short course. Together you could put 12-14 really good holes on a meandering, real-grass putting green complex.  Charge me $20 for unlimited play, $10 for an hour.

My vote would be that they bulldoze #18 on clay for the putting course

Haha seconded. That hole blowz.

[horn4life 3761]

Tits and Tees- I like it.  

Maybe they could also have Porno Putt Putt?  You could get pretty creative with the hole placement...

[Texas St. Armadillos 1381]

On 11/1/2020 at 11:46 AM, BradInATX said:

On 11/1/2020 at 9:30 AM, capnamerca said:

real grass would never work at TopGolf, but I'd love to see someplace with a decent amount of land try it - maybe Clay/Kizer, who already have lights in place, and a short course requiring maintenance. They could take the last ~20 yards of the range, and bulldoze the fake practice green on the short course. Together you could put 12-14 really good holes on a meandering, real-grass putting green complex.  Charge me $20 for unlimited play, $10 for an hour.

My vote would be that they bulldoze #18 on clay for the putting course

And maybe #3.  The 2 worst tee shots I know of.