Topgolf Callaway will move forward with a plan to split the company in two.
Topgolf Callaway
Three years after Topgolf and Callaway merged to form Topgolf Callaway, the two sides announced their intention to go their separate ways in 2025.
In a statement Wednesday, Topgolf Callaway Brands Corp., the company that oversees both brands, confirmed it will continue with a plan to split the company in two, possibly starting with Topgolf next year.
The reason for the change of heart? Topgolf Callaway believes that brands are powerful in their own right.
“We believe that this business, independently, will be well understood and appreciated by the market,” said Chip Brewer, president and CEO of Topgolf Callaway. “Since joining Topgolf, we have made significant investments in the Topgolf business that have significantly increased its quality, digital capabilities and geographic leverage. This investment, combined with the hard work of the Topgolf team, has allowed us to significantly outperform our early growth and free cash flow expectations.”
Topgolf's well-known spin-off into a “standalone public company,” in the second half of 2025, is a potential departure. However, other divestment options are also being considered in the name of shareholder value. In other words, nothing is certain. What is certain is that Topgolf Callaway believes that the two brands “represent distinct and compelling investment opportunities” in their own right.
Under the proposal, Topgolf Callaway would divest “at least 80.1 percent” of Topgolf to “obtain the desired tax-free treatment of the spinoff for US federal income tax purposes.” Another consideration is “maintaining limited ownership in Topgolf for a period of time.”
“Topgolf has a different operating model, capital structure and investment thesis than Callaway, and as such, the Board has determined that separating Topgolf will best position Topgolf and Callaway to succeed and increase shareholder value,” said Brewer.
Callaway first invested in Topgolf in 2006, before increasing its stake to 14 percent in 2018. Two years later, in 2020, the two parties met and eventually changed the name to Topgolf Callaway, in March 2021, when Callaway completed the acquisition of all stock. ($2.66 billion) of Topgolf Entertainment Group.
The news of the launch comes six months after the South Korean report Chosun Daily he said Callaway could be liquidated and sold so management could focus solely on its high-tech Topgolf driving range. Shortly after the report appeared, Callaway issued a statement confirming that they were “not aware of such discussions.”
Topgolf Callaway's current portfolio includes Callaway, Topgolf, Travis Mathew, TopTracer, Jack Wolfskin, Odyssey, OGIO and World Golf Tour.
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