A South Korean newspaper is reporting right this moment that golf’s greatest firm, Topgolf Callaway, could also be up on the market.
That’ll put a jolt in your Wednesday, received’t it?
The Chosun Each day is reporting that Topgolf Callaway’s three largest buyers are becoming a member of collectively to promote their possession stakes and administration rights. These main shareholders embody BlackRock Advisors LLC, Windfall Fairness Companions LLC and Thomas Dundon. Collectively they personal over 33 p.c of Topgolf Callaway shares.
The paper additionally studies that the plan is to spin off the Topgolf enterprise and promote the Callaway golf and attire enterprise for roughly $3 billion.
A South Korean funding firm is alleged to be the main candidate to land the Callaway enterprise.
One essential be aware: no different main information outlet has confirmed the Chosun Each day story.
Topgolf Callaway share costs soared in premarket buying and selling on account of the report. Costs reached a 2024 excessive of $16.25. The present value as of this writing is up over 11.5 p.c over yesterday.
Topgolf Callaway this afternoon issued this assertion:
“Whereas it’s our long-standing observe not to answer market rumors and hypothesis, in mild of right this moment’s uncommon market exercise, coupled with a current media report originating in Korea relating to discussions of a possible sale of the Firm or its golf gear enterprise, we verify that we aren’t conscious of any such discussions. We don’t intend to remark additional on this matter, and we assume no obligation to make any additional announcement or disclosure ought to circumstances change.”
WOW, Simply WOW
Topgolf Callaway completed 2023 with complete gross sales topping $4.28 billion, with an annual revenue of $95 million. All three of the corporate’s enterprise models completed the yr with a minimum of $1 billion in gross sales, led by the Topgolf division at $1.76 billion. The corporate opened 11 new Topgolf venues in 2023, with plans for eight extra to be opened this yr.
The Callaway model completed 2023 because the main golf gear model, with No. 1 market share positions in complete golf equipment, drivers, fairway woods, hybrids and irons.
If this story is true and the Callaway model is offered to a South Korean entity, that will make three of the highest 4 corporations in golf owned by South Korean pursuits. Controlling curiosity within the publicly traded Acushnet, the father or mother firm of Titleist, was acquired by FILA in 2011. Seoul-based non-public fairness agency Centroid Funding Companions purchased TaylorMade in 2021.
It might be unrelated, however yahoo/finance is reporting that Centroid stated final month it’s within the technique of elevating a $500 million fund for a brand new acquisition.
PING stays privately owned by the Solheim household.
COBRA is owned by PUMA which, like Acushnet and Topgolf Callaway, is publicly traded. Its largest shareholder is the Pinault Francois household.
What This Means
It’s method to early to inform. But when it does come to fruition is represents a seismic change within the golf panorama. It shouldn’t be thought-about a dying knell for Callaway, nonetheless, or perhaps a damaging. South Korean possession has not harm the enterprise for both TaylorMade or Acushnet nor has it impacted the general high quality or efficiency of every firm’s gear.
Any potential sale is solely a byproduct of being a publicly traded firm in a worldwide market.
Callaway merged with Topgolf in March of 2021 (it already owned a 20 p.c stake), and rebranded itself as Topgolf Callaway. The deal was value a reported $2 billion. Shortly after the merger, Topgolf Callaway inventory peaked at practically $37 per share. Regardless of report annual gross sales the previous two years, the inventory dropped to a low of $10.05 final November. It closed at $13.91 yesterday earlier than studies of a potential sale broke.
Nonetheless Only a Rumor
As soon as once more, whereas this story is being broadly reported, it has not been confirmed outdoors of the Chosun Each day report. Funding analysts are urging warning. however some see it as a probably optimistic transfer for each Callaway and Topgolf.
Raymond James analyst Joseph Altobellow, quoted by yahoo/finance, says “A separation of the 2 companies may make strategic sense, as they provide little in the best way of synergies.” In its annual report, Topgolf Callaway introduced it could be making efforts to promote its golf gear by way of Topgolf venues, putting Topgolf instructing professionals on Callaway employees and making its gear obtainable to hire at every venue.
Enterprise Insider is reporting heavy buying and selling of Topgolf Callaway shares right this moment. As of late this morning, practically 5 million shares had been traded. That’s practically double the typical every day quantity of two.7 million shares.
MyGolfSpy will replace this text all through the day as extra data turns into obtainable.
