Golf Business News – Topgolf Callaway Brands will be split into two separate companies

Topgolf Callaway Brands Corp announced that it will separate its equipment business and its golf entertainment business into two separate and independent companies.

The split comes three and a half years after the two companies merged following Callaway's acquisition of Topgolf in March 2021.

Callaway will combine the company's existing golf equipment and active lifestyle businesses, as well as Toptracer – and is expected to retain all of Topgolf Callaway Brands' existing financial liabilities.

Topgolf will be debt-free and funded by 'significant surplus', but new development plans for 2025 will be reduced to 'mid-single digit range'.

Callaway reported $2.5 billion in revenue (including Toptracer) in the 12-month trading period from Q2 2023 to Q2 2024, while Topgolf reported $1.8 billion in revenue for the same period.

Callaway will be led by CEO Chip Brewer, and Artie Starrs will remain as Topgolf's CEO.

Speaking about the breakup, Brewer said: “Over the past decade, we've transformed Callaway into the no.1 brand in golf equipment, while building a successful business with accessories and accessories. We believe that this business, which is independent, will be well understood and appreciated by the market.

“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.”

“Looking forward, we remain confident that Topgolf is a high-quality cash flow generating business with significant opportunity to create future value. Topgolf is revolutionizing the game of golf and is expected to deliver significant financial returns over time. At the same 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.”

“Today's announcement is the result of a comprehensive strategic review by the Board of Directors and management team,” said John Lundgren, Chairman of the Board of Directors of Topgolf Callaway Brands. “The creation of two independent companies, each with a unique focus and proven business model, is intended to drive momentum in both businesses and deliver value to all of our shareholders.”