Register for a free SBJ account to unlock one extra article per month. 2023 Leaders Group. A long-term forecast of each of these line items is not available without unreasonable efforts due to the variability of these items and the inability to predict them with certainty. Said PGA Tour CMO Joe Arcuri, It is great for the tour product and for future fans. Topgolfs venue revenue has now rebounded to about 85% of pre-pandemic levels and all of the companys locations have reopened. Holding all other assumptions constant, Topgolf could be worth $17.9 billion and $95.91 per share if Callaway can effectively expand internationally. (760) 931-1771 Gambling problem? We also occasionally include links to products and services from merchants of our choice. If you've never been to a Topgolf, it's basically the golf version of a bowling alley. More than half of Topgolfs customers identify themselves as non-golfers, giving Callaway early exposure to potential golfers. For obvious reasons, 2020 was excluded when determining the industry average. Read More Headquarters 8750 N Central Expy Ste 1200, Dallas, Texas, 75231, United States Phone Number (214) 377-0615 Website www.topgolf.com Revenue $1B Industry While golf has struggled in recent years with courses closing across the country, the pandemic has actually been a boon as more corporate employees work from home, along with the outdoor atmosphere golfing provides. According to the release, Topgolf is in the early stages of a 10-year unit growth plan. What do legacy golf companies like Callaway plan to do about it? The latest personnel hires and promotions, plus exclusive ratings and research from the sports industry. Tech entrepreneur Ryan Smith purchased a majority stake in the Utah Jazz yesterday, which values the team at $1.6 billion. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. Our track record of creativity and diversity of offerings will only grow stronger as part of Callaway, a global leader in the industry, said Erik Anderson, executive chairman of Topgolf. Upon closing, the combined companys Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. Whatever it has been doing has not been working. Callaway already had an exclusive relationship with Topgolf, which put their clubs, merchandise, and apparel in every location worldwide, but you can expect Callaway penetrate that relationship even more. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. It is classified as operating in the Arts, Based on currently available information, the Company estimates the following results for the quarter endedSeptember30, 2020: * Earnings before Interest, Taxes, Depreciation and Amortization Expense, and Stock Compensation Expense. The deal is expected to close in early 2021. Another literal connective effort is Topgolfs latest plan to build a new venue on the site of a West Palm Beach, Fla., public golf course. (3) Represents non-recurring costs associated with the Company's transition to its new North America Distribution Center, implementation of new IT systems for Jack Wolfskin, and $0.7 million of severance related to the Company's cost reduction initiatives. Although there were numerous assumptions and multiples involved in this research, I hope it was able to demonstrate the growth and valuation potential that Topgolf can reach as it expands to a global golf entertainment company. And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. The transaction is subject to the approval of the shareholders of both Callaway and Topgolf, as well as other customary closing conditions, including required regulatory approval. Stay informed and spot emerging risks and opportunities with independent global reporting, expert Using the same EBITDA margin and revenue per venue, we are able to project out Topgolfs future performance and add additional assumptions regarding new venues from managements guidance. Information regarding Callaways directors and executive officers is contained in Callaways Annual Report on Form 10-K for the year ended December 31, 2019 and its Revised Definitive Proxy Statement on Schedule 14A, dated March 27, 2020, which are filed with the SEC and can be obtained free of charge from the sources indicated above. Based on Mondays closing price of $29.52 per share, Callaway paid $2.66 billion to acquire the rest of Topgolf beyond its existing ownership. Now that Callaway is buying Topgolf at a $2 billion valuation, a 50% haircut to their projected IPO price earlier this year, whats the plan? A live webcast of the conference call and downloadable slides will be available online at: https://ir.callawaygolf.com. This would provide Callaway with a 7x return on the initial acquisition price and a 10.13% CAGR. The high degree of interest in the game of golf as well as the past and future growth prospects of Topgolf makes Callaway one of the most intriguing investment opportunities. On a percentage basis, over 95% of Topgolfs revenue is broken out evenly between gameplay, events, and food & beverage which is interesting considering a typical driving range might hardly make any money off food & beverage or events. In the next 10 years, we think that we can double the size of the business and add another 8,000 bays, said Topgolf CEO Dolf Berle. Carlsbad, Calif.-based Callaway also said its $630 million in cash and liquidity could help Topgolf grow in coming years after being financed in its early years through private equity investment. Apart from Callaways previous 14% share in the golf-entertainment business, Topgolf also had major ownership stakes from Providence Equity Partners, WestRiver Group and Dundon Capital Partners, the Dallas-based investment arm of Carolina Hurricanes owner Tom Dundon. Dr Pepper flavored Peeps arrive in Texas soon. Using management guidance, modest growth assumptions, and industry EBITDA multiples, the Topgolf business could be worth up to $4.3 billion by 2025. As Topgolf continues to expand, all eyes will be on whether Topgolf can play a major role in developing a new generation of golfers and enthusiasts of the game. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per month. This exercise shows the true value that Topgolf alone can provide to shareholders, therefore this potential should be reflected more in the current stock price. It is something that the game hasnt seen in a while.. The company is headquartered in Dallas, Texas. 12+ Lunar New Year food events and specials at D-FW restaurants, French bistro La Parisienne to open at The Star in Frisco, New Chick-fil-A opens in downtown Dallas this week, La Casita has become one of the biggest bakeries in D-FW, and its just getting started, New legislative push begins to end Confederate Heroes Day as an official Texas holiday, Dallas Cowboys signing kicker Tristan Vizcaino to practice squad, Dallas ranked among the most congested cities in the U.S. as work from home is phased out, Tax relief, border security, state worker pay raises among Texas Houses top wishes, The Dallas Morning News 2022 All-area teams, football awards and more, Prime Prosper corner just north of Universals future Frisco theme park hits the market, 5 things to know about Brett Maher, Cowboys kicking situation, New Frisco shopping center is moving ahead with developer funding. 6 Implied equity value of $1.739 billion when accounting for the various preferential rights of Topgolf shareholders and excluding assumed stock options and Callaways ownership position About 75 percent of non-golfers who go to Topgolf say they are interested in extending to an actual golf course, which is hugely important. After extensive research and analysis, Zippia's data science team found the following key financial metrics. However, once completed, management estimates that on average a typical venue generates $17 million in annual revenue and $5 million in adjusted EBITDA. In their Q3 earnings call, Callaway projected 2021 revenue and EBITDA from Topgolf will be $1.06 billion and $158 million; this provides an EBITDA margin of 14.91%. Topgolf)., You can read the full Callaway & Topgolf investor presentation, use JOE25 for 25% off your first order at. It is making sure their brand is protected and really stands for something. Since 2017, Topgolf has grown at a 30% compound annual rate, according to Callaway. Topgolf venues overall averaged more than 35,000 customer visits per day last year, with the average customer spending two hours per visit at a venue, according to the company. Topgolf will continue to operate from its headquarters in Dallas, Texas. Non-GAAP Reconciliation and Supplemental Financial Information, Non-recurring and non-cash charges, before taxes(1). Therefore, adjusted revenue and EBITDA numbers for the full-year 2021 would be around $1.3 billion and $190 million. Calloway's stock is at the same price as it was in 1998. Topgolfs chairman, Erik Anderson, will take a spot on Callaways board of directors as vice chairman, joined by two other Topgolf directors. Topgolf is merging with Callaway in a deal valued at $2 billion According to Topgolf, the new facility will cost nearly $40 million and will create 325 full-time and part-time jobs. and other data for a number of reasons, such as keeping FT Sites reliable and secure, If you would like to receive it directly in your inbox, subscribe now. (1) Callaway Golf charges include: Non-recurring transaction and transition costs associated with the acquisition of Jack Wolfskin, including banker's fees, legal fees, consulting and travel expenses, audit fees and valuations services, as well as non-cash charges related to the valuation of acquired inventory, in addition to other non-recurring advisory fees. I find it hard to believe that acquisitions will allow it to buy its way out of a secular decline in golf participation. SBJ I Factor presented by Allied Sports features an interview with Orlando Magic CEO Alex Martins. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. In 2019, amounts represent certain non-recurring transition costs associated with the acquisition of Jack Wolfskin, including consulting costs, audit fees and travel expenses, in addition to other non-recurring advisory fees. 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