California-based Callaway Golf (legally Topgolf Callaway Brands Corp.), one of the world’s top three golf brands (Titleist, Callaway Golf, and TaylorMade), is up for sale. A South Korean strategic investor (SI) is reportedly in the running to acquire the company, valued at around $2.98 billion (4 trillion won).
According to the investment banking (IB) industry, Callaway Golf’s major shareholders - BlackRock Advisors LLC (12.09%), Providence Equity Partners LLC (11.48%), and Thomas Dundon (10.11%), a founder of Dundon Capital Partners, a Dallas-based private investment firm - have selected a lead manager and are in the process of selling their stakes and management rights.
Callaway Golf is one of the world’s largest golf brands. Last year, the company reported sales of $4.285 billion, up 7.2% year-over-year. Net income was $95 million. The company is currently listed on the New York Stock Exchange (NYSE) and has a market capitalization of $2.554 billion (about 3.4 trillion won).
The major shareholders will reportedly spin off Topgolf, a subsidiary of Topgolf Callaway Brands Corp., and sell only Callaway Golf. Topgolf is a premier entertainment venue featuring indoor golf games, a full-service bar, and a restaurant. The sports entertainment company was acquired by Callaway Golf in 2020 and the merged company adopted the name Topgolf Callaway Brands. Last year, it had revenue of $1.76 billion.
The current rumored sale price for Callaway Golf is around $2.98 billion (4 trillion won). The price is considered to be reasonable by industry players given its significantly low market capitalization of $2.554 billion (about 3.4 trillion won), compared to that of rival Acushnet Holdings (Titleist) of $3.902 billion, and an accompanied management premium.
The IB industry has been paying attention to the possibility of Callaway Golf becoming Korean-owned. A South Korean company is reportedly in the running.
If the American sports brand is acquired by a South Korean company, the global big three golf brands will be South Korean. Titleist was acquired by KRX-listed FILA Holdings Corp. in 2011. TaylorMade was also sold to a Seoul-based private equity firm Centroid Investment Partners LC in 2021. At that time, F&F, a South Korean apparel company, participated as the SI.
