However, the Company has not completed its financial closing procedures for the three months ended September 30, 2020, and its actual results could vary materially from these preliminary estimates. (2) Represents the non-cash amortization of the debt discount on the convertible notes issued in May 2020. Topgolf revenue is $220.0M annually. Topgolf is doing some interesting things and is having an impact, said Scott Seymour, senior vice president and managing director of Octagons golf business. Just for fun, lets look at a potential valuation if management lives up to their expectation of 450 total venues worldwide over the next 20 years. The number of shares to be issued is based upon an implied equity value of Topgolf of approximately $2 billion, including the 14% already owned by Callaway. With such dizzying expansion, its no surprise that the PGA Tour, PGA of America and LPGA have promotional partnerships with the company in an attempt to convert the hordes of casual and non-golfers who are flocking to Topgolf over to traditional golf. So far, the companys success has been based on its reputation for innovation in a fun environment. Gambling problem? Management uses such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate period-over-period comparisons and in forecasting the Company's business going forward. 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. That doesnt include Callaways previous ownership stake. And for Topgolf, despite its current success, how does it continue to scale and generate repeat visitors? Drive Shack, backed by TaylorMade, this spring is set to debut its first golf/entertainment facility in Orlando with a three-story driving range that, like Topgolf, will offer a bar and restaurant experience. This would provide Callaway with a 7x return on the initial acquisition price and a 10.13% CAGR. While the company is expanding, it lacks a large presence in the Northeast and in Southern California, with no current facilities in Los Angeles or San Diego. 1 Golf Datatech industry report published September 21, 2020
And our climate-controlled bays mean your party will rock on through rain, heat, cold or whatever else Mother Nature throws at you. Callaway Golf Company (NYSE: ELY) is a premium golf equipment and active lifestyle company with a portfolio of global brands, including Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin. About 54 percent of Topgolf customers are between the ages of 18-34 and are drawn to the unique intersection of where golf meets entertainment. These selected companies were Dave & Buster's (PLAY), Live Nation (LYV), Drive Shack (DS), Cinemark (CNK), and Disney (DIS) who all have a component of in-person entertainment venues as a large part of their business. This includes favorable trends in rounds played and growth in beginning and returning golfers as well as broader consumer preferences for outdoor activities.2,3The combined company will have a highly diversified revenue mix, including Golf Equipment, 30%; Topgolf, 46%; and Softgoods, 24%4. I am not receiving compensation for it (other than from Seeking Alpha). Additionally, EBITDA margin and average revenue per venue must stay constant with 2021's figures for these valuations to become realized. 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. Due to the constant popularity of Topgolf venues as well as the sport, I believe locations will continue to report exceptional revenues. The foregoing list is not exhaustive. The Dallas company has grown at a 30 percent compound annual rate since 2017 and recorded $1.06 billion in sales last year with a net loss of $114.9 million. Under the terms of the merger agreement, Callaway will issue approximately 90 million shares of its common stock to the shareholders of Topgolf, excluding Callaway, which currently holds approximately 14% of Topgolfs outstanding shares. Paul directs the work of an award-winning staff covering business news in the nation's fourth largest metro region. The company has a proven ability to innovate to expand its addressable market and capture the potential of games and content on its interconnected platform. Along with the announcement, Callaway released a 30-page presentation giving rare insight into Topgolfs existing ownership structure, financials, and projections. The player data is immensely attractive. If you havent seen it, check it out its worth the read. Maintaining our same EBITDA multiple range of 8.20x to 12.75x, the Topgolf business could be worth up to $4.3 billion in total value and $23.02 per share by 2025. Kyle Arnold. A recent survey conducted for Topgolf by the National Golf Foundation shows that 23 percent of new golfers started playing after their first Topgolf experience, while 75 percent of non-golfers said they were interested in playing on a traditional course after playing Topgolf. Topgolf is broadening and deepening and driving a younger demographic to be aware of golf, said Andy Pierce, global president of golf and consulting for Lagardre Sports and Entertainment. People come back, it is a meaningful repeat business, he said. What started as a simple idea to enhance the game of golf has grown into a movement where people from all walks of life connect at the intersection of technology and sports entertainment. The demographics making up Topgolfs customer base is exactly where Callaway is lacking. or In a statement, the House Ways and Means chair explained For Callaway:
Topgolf currently has 28 open locations in the United States, with another dozen opening soon all over the place. Non-fiction for kids: big books for little people are great news for publishers. Revenue at golf courses and clubs improved from $29.9 billion in 2011 to Company is the darling of the golf industry
but faces challenges as it takes its growth to the next level. WebTopgolf: An entertainment complex that provides competitive golfing games for individuals and groups of all ages and skill levels. Topgolf also hires PGA professionals as instructors at Topgolf venues, while the PGA Tour and the LPGA co-promote with Topgolf by holding sponsor and media activities at Topgolf venues. 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. He's been The News' business editor since 2015. Topgolf peak revenue was $220.0M in 2021. Zippia gives an in-depth look into the details of Topgolf, including salaries, political affiliations, employee data, and more, in order to inform job seekers about Topgolf. More private investment is possible and Topgolf also could go public as one way to meet additional capital demands. It's a driving range where players of all skill levels can hit balls, each with an RFID chip in them, to different targets up and down the range. I have no business relationship with any company whose stock is mentioned in this article. Dont sacrifice your ability to be healthy, active, and at your best to enjoy a great beer - Athletic Brewing has created an innovative lineup of refreshing, non-alcoholic craft beers. We are not nave to say we would never look at it. The preliminary estimates presented above are the responsibility of management and have been prepared in good faith on a consistent basis with prior periods. The Company has provided reconciling information in the attached schedules. Furthermore, Topgolf will have 70 venues by the end of 2021 with a total of 9 net new venues opened throughout the duration of the year. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus/consent solicitation and other documents filed with the SEC by the parties through the website maintained by the SEC at www.sec.gov. Please disable your ad-blocker and refresh. It starts with the fact that the millennial audience is largely focused on experiences, Horne said. The Callaway golf business, and the game of golf itself is experiencing unprecedented growth, Brewer said. Topgolf generated $1.1 billion in revenue last year at 63 locations that drew more than 23 million customers. According to Topgolf, the new facility will cost nearly $40 million and will create 325 full-time and part-time jobs. Callaways continued strong cash generation and ample liquidity, including more than $630 million of cash and available credit facilities as of Q3 2020, position the company to fund Topgolfs continued growth with significant ability to pay down debt at the same time. 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. 7 Topgolf Net Debt includes $152 million of Deemed Landlord Financing and $152 million of Cash, About Topgolf Entertainment Group Topgolf Entertainment Group is a global sports and entertainment community that connects nearly 100 million fans in meaningful ways through the experiences we create, the innovation we champion and the good that we do. 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. Topgolf is expected to generate $1.06 billion in revenue and $158 million in EBITDA in 2021. Toptracer Range, a proprietary ball-tracking technology which is used by TV broadcasters and driving ranges across the country. The employee data is based on information from people who have self-reported their past or current employments at Topgolf. 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. Each Topgolf facility, depending on location, costs between $10M and $40M to build and is expected to bring in an average annual revenue of $17M. Remaining privately-owned during those two decades, the company built locations in every region of the country. It was a Tuesday and it was packed, Whan remembers. In addition, the Company's independent registered public accounting firm has not audited this information or completed its quarterly review procedures for the quarter ended September 30, 2020 and does not express an opinion or any other form of assurance with respect to these preliminary estimates or their achievability. Access to easy-to-read digital editions of weekly issues. It is something that the game hasnt seen in a while.. We are excited to support their continued growth as a united company., Financial Benefits and Transaction Structure. Topgolf Entertainment Group's platforms include Topgolf venues, Topgolf International, Toptracer, Topgolf Media and Topgolf Swing Suite. After extensive research and analysis, Zippia's data science team found the following key financial metrics. Callaway Golf Company will file with the SEC a registration statement on Form S-4, which will include the proxy statement of Callaway Golf Company that also constitutes a prospectus of Callaway Golf Company and a consent solicitation statement of Topgolf International, Inc. (the proxy statement/prospectus/consent solicitation). Through an unwavering commitment to innovation, Callaway manufactures and sells premium golf clubs, golf balls, golf and lifestyle bags, golf and lifestyle apparel and other accessories. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. Upon closing, the combined companys Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. We support credit card, debit card and PayPal payments. As part of Callaway, we plan to grow our leadership position by leveraging Callaways brand reputation, industry relationships and financial strength to connect more communities around the world to the Topgolf experience.. Upon completion of the merger, Callaway shareholders will own approximately 51.5% and Topgolf shareholders (excluding Callaway) will own approximately 48.5% of the combined company on a fully diluted basis. While the eye-popping success of Topgolf has pleasantly surprised industry insiders and provided the sport with a jolt of innovation, just how much can Topgolfs massive draw help the golf business? Callaways existing shareholders will own about 51.5% of the combined firm, with the remaining 48.5% going to Topgolfs own investors. Topgolf projects adding more than 3,500 bays in 2020, and around 8,000 new bays per year starting in 2022. Itll be fun to see how creative Callaway gets in an attempt to funnel recreational driving range visitors into legitimate customers for their existing brand. This suggests that based on the current industry multiples and Topgolfs performance coming out of COVID, Callaway did not drastically overpay in the merger when you look towards the higher range of the valuation. 2 National Golf Foundation, August Rounds Play, Published September 2020
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