Overhead can also run high, as Topgolf has about 15,000 full and part-time employees overall, which leads to staffing and training challenges as the company manages growth while focusing on providing a consistent and engaging fan experience. 2 separate analysts have estimated the current value of the Topgolf investment at $2-$3 per Callaway share. 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 Topgolf is the leading tech-enabled golf entertainment business, with an innovative platform that comprises its groundbreaking open-air venues, revolutionary Toptracer technology and innovative media platform with a differentiated position in eSports. commentary and analysis you can trust. If you would like to receive it directly in your inbox, subscribe now. The employee data is based on information from people who have self-reported their past or current employments at Topgolf. 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. All rights reserved.The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Leaders Group. Information regarding the persons who are, under the rules of the SEC, participants in the solicitation of the stockholders of Callaway and Topgolf, respectively, in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement/prospectus/consent solicitation when it is filed with the SEC. John Lundgren will continue as Chairman of the Board of the combined company, while Erik Anderson will serve as Vice Chairman. The venues include golf driving bays that use its ball-tracing technology to make games out of the experience, along with food, music and golf retail. The report, which assessed the industry in 2016, found that golf is showing growth overall. Topgolf Entertainment Group's platforms include Topgolf venues, Topgolf International, Toptracer, Topgolf Media and Topgolf Swing Suite. 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. We use 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. The majority of Topgolfs revenue comes from physical locations, but they also have a growing technology business, which Callaway envisions being a significant source of revenue in the future. Looking for a great beer for Sunday through Thursday nights? Each Topgolf location costs about $20 million to build, and these locations have typically paid for themselves in two years. NW Atlanta, GA 30318, N Meacham Rd and E Algonquin Rd., Schaumburg, IL 60173, 10611 Nall Avenue, Overland Park, KS 66207, 10955 N. Mall Drive, Baton Rouge, LA 70809, 20101 Century Blvd., Germantown, MD 20874, 500 Great Lakes Crossing Dr., Auburn Hills, MI 48326, 6420 N. Camden Ave., Brooklyn Center, MN 55430, 16851 N. Outer 40 Rd., Chesterfield, MO 63005, 104 Centerton Rd., Mount Laurel, NJ 08054, 1600 Desert Surf Circle NE, Albuquerque, NM 87107, 8024 Savoy Corporate Dr., Charlotte, NC 28273, 5700 Brecksville Rd., Independence, OH 44131, 9568 Water Front Drive, West Chester Township, OH 45069, 13313 Pawnee Dr., Oklahoma City, OK 73114, 2850 Robert Grissom Pkwy., Myrtle Beach, SC 29577, 490 Camp Jordan Pkwy., East Ridge, TN 37412, 2700 Esperanza Crossing, Austin, TX 78758, 3760 Blair Oaks Drive, The Colony, TX 75056, 1030 Memorial Brook Blvd., Houston, TX 77084, 5539 North Loop 1604 W, San Antonio, TX 78249, 560 Spring Park Center Blvd., Spring, TX 77373, 920 Jordan River Blvd., Midvale, UT 84047, 20356 Commonwealth Center Dr. Ashburn, VA 20147, 5444 Greenwich Road, Virginia Beach, VA 23462. Check out how Callaways annual revenue has responded (Source): Which brings me to my next point Callaway is doubling down on diversification. It was a Tuesday and it was packed, Whan remembers. Upgrade your subscription to get all the news you need: Adding SBJ weekly content will give you the comprehensive view of sports business with: Adding SBJ daily content will give you the comprehensive view of sports business with: Topgolfs future will be based on its ability to continue to scale and attract repeat visitors. Standard Digital includes access to a wealth of global news, analysis and expert opinion. Topgolf revenue is $220.0M annually. 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. https://huddleup.substack.com/p/callaway-and-topgolf-breaking-down Callaway is issuing about 90M shares to facilitate the merger stock is down about 20% in response. Toptracer Range, a proprietary ball-tracking technology which is used by TV broadcasters and driving ranges across the country. These risks, uncertainties and other factors relate to, among others: risks and uncertainties related to our pending merger with Topgolf, including the failure to obtain, or delays in obtaining, required regulatory approval, the risk that such approval may result in the imposition of conditions that could adversely affect Callaway or the expected benefits of the proposed transaction, any termination fee that may be payable by Callaway pursuant to the terms of the merger agreement, or the failure to satisfy any of the closing conditions to the proposed transaction on a timely basis or at all; costs, expenses or difficulties related to the merger with Topgolf, including the integration of the Topgolf business; failure to realize the expected benefits and synergies of the proposed transaction in the expected timeframes or at all; the potential impact of the announcement, pendency or consummation of the proposed transaction on relationships with Callaways and/or Topgolfs employees, customers, suppliers and other business partners; the risk of litigation or regulatory actions to Callaway and/or Topgolf; inability to retain key personnel; changes in legislation or government regulations affecting Callaway and/or Topgolf; uncertainty of the duration, scope and impact of COVID-19; a further spread or worsening of COVID-19; any further regulatory actions taken in response to COVID-19, including the future shutdown of or restrictions on Callaways or Topgolfs retail locations, venues, distribution centers, manufacturing plants or other facilities; the effectiveness of Callaways or Topgolfs protective gear, social distancing guidelines, and other preventive or safety measures; disruptions to business operations of Callaway and Topgolf as a result of COVID-19, including disruptions to business operations from travel restrictions, government-mandated or voluntary shut-down orders or quarantines, or voluntary social distancing that affects employees, customers and suppliers; continued growth, momentum and opportunities in the golf industry; production delays, closures of manufacturing facilities, retail locations, warehouses and supply and distribution chains; staffing shortages as a result of remote working requirements or otherwise; uncertainty regarding global economic conditions, particularly the uncertainty related to the duration and impact of the COVID-19 pandemic, and related decreases in customer demand and spending; and economic, financial, social or political conditions that could adversely affect Callaway, Topgolf or the proposed transaction. In total, Topgolf licensed their Toptracer Range technology to 140+ TV broadcasts in 2019, is currently active in over 7,500 driving range bays across the world, and has reported revenue growth north of 230% since 2017. Topgolf is a growing and potentially large business that Callaway appears to have acquired at a good price, but thats only part of the equation. Bottom line Topgolf has developed a unique way to engage an entire new generation of individuals that werent interested in golf before. Averaging out these 2 years resulted in an EBITDA range of 8.20x to 11.65x. Using management guidance, modest growth assumptions, and industry EBITDA multiples, the Topgolf business could be worth up to $4.3 billion by 2025. The parties expect to complete the transaction in early 2021, subject to satisfaction of these conditions. Non-GAAP Reconciliation and Supplemental Financial Information, Non-recurring and non-cash charges, before taxes(1). I have no business relationship with any company whose stock is mentioned in this article. 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. Callaway announced the deal along with its third-quarter financial results, noting 12% year-over-year revenue growth to $476 million. In a statement, the House Ways and Means chair explained The part you didn't know? As a result, investors should exercise caution in relying on this information and should not draw any inferences from this information regarding financial or operating data not provided. Under the terms of the agreement, Callaway and Topgolf will combine in an all-stock transaction creating a global golf and entertainment leader. At Topgolf, you pay for time at a bay, which you should typically reserve well in advance of your visit if it's a weekend. Getting good locations is hard, training is hard and we compete against all forms of entertainment, Anderson said. Subscribe to receive our press releases via email: Topgolf Kicking Off 2023 with Opening of Charleston Venue, Pro forma revenue of approximately $2.8 billion based on fiscal year 2019 results that is expected to grow to approximately $3.2 billion by 2022 and at approximately 10% per year in the years following, Pro forma adjusted EBITDAS of $270 million based on fiscal year 2019 results that is expected to grow to approximately $360 million by 2022 and at mid-to-high teens per year in the years following. personalising content and ads, providing social media features and to The adjusted current EBITDA multiple was created by using the current market capitalizations and an average of pre-COVID EBITDA numbers, resulting in slightly higher multiple at 12.75x which is to be expected in todays market. Follow @topgolf on Instagram, Facebook, Twitter and LinkedIn, or visit the Topgolf Press page for the latest news. Every morning I write an email discussing the business and money behind sports. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many users needs. All of us are looking forward to building new experiences, reaching new audiences and solidifying our digital infrastructure as we connect communities around the globe., In addition to Callaway, the current Topgolf ownership includes Providence Equity Partners, WestRiver Group and Dundon Capital Partners, which added: This is a natural combination that brings together two complementary businesses at the center of one of the most dynamic sports and entertainment experiences available today. Upon closing, the combined companys Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. 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. For more information please visit www.callawaygolf.com, www.odysseygolf.com, www.OGIO.com, www.travismathew.com, and www.jack-wolfskin.com. Even with the dizzying ascent of the company, Topgolf faces challenges with its growth and expansion. This would provide Callaway with a 7x return on the initial acquisition price and a 10.13% CAGR. 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. For a full comparison of Standard and Premium Digital, click here. 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