Dive Brief:
- Topgolf Callaway Brands has entered into a definitive agreement to sell 60% of its Topgolf and Toptracer business to private equity funds managed by Leonard Green & Partners; the deal values Topgolf at about $1.1 billion, the company said Tuesday in a press release.
- Topgolf Callaway Brands will receive about $770 million in net proceeds, according to the press release. A Securities and Exchange Commission filing noted that estimate is based on a $660 million purchase price for the share of Topgolf, with the remaining proceeds deriving “from the financing transactions, net of transaction fees and estimated purchase price adjustments.”
- Topgolf Callaway Brands originally planned to split its business into two independent entities after same-venue-sales fell, but that was delayed after Artie Starrs resigned from his post as CEO Topgolf in August.
Dive Insight:
Callaway originally merged with Topgolf in 2021 creating Topgolf Callaway Brands, which invested in scaling the eatertainment brand and boosting venue profitability. Separating the businesses will allow for enhanced strategic focus within each division, the ability to optimize capital allocation and simplified operating structures. The current plan is slightly different from Topgolf Callaway’s original plan in 2024, when it sought to sell at least 80% of the eatertainment chain.
The company received interest from a number of potential buyers, Chip Brewer, president and CEO of Topgolf Callaway said in a statement. It selected LGP because the private equity firm has a “track record of success in investing in high-growth consumer companies and is an ideal partner for Topgolf in its next chapter,” Brewer said.
Topgolf has already begun to turnaround sales, reaching positive same-venue-sales during the third quarter and traffic growth resumed midyear, Brewer said during an October earnings call. Same-venue sales were up just over 1%. Guests that play in one to two hitting bays make up 80% of annual revenue, and that business posted positive Q3 traffic in the high teens. This segment also posted a same-venue-sales increase of 2.4%, Brewer said, attributing this growth to ongoing consumer appeal of Topgolf and value initiatives like Sunday Funday and half-off golf Monday to Thursday.
Topgolf has improved its digital channel and is in the process of rolling out Toast’s point-of-sale system. That system has improved speed of service, driving better labor efficiency and spend per visit.
LGP currently invests in various consumer brands, including Zaxbys and Velvet Taco. It previously invested in Shake Shack, according to its website. LGP has obtained debt and equity commitments for the deal. The transaction is expected to close during the first quarter of 2026.
Following the completion of the transaction, Topgolf Callaway will rename itself Callaway Golf Company with a portfolio consisting of Callaway, Odyssey, TravisMathew and Ogio.
