GolfNewsRI

Topgolf and Callaway announced plans to split into two different companies on Wednesday, in a bit of a surprise move.

Callaway merged with Topgolf in 2021 and have since opened numerous venues all over the country, including here in Rhode Island. 

“Since our merger with Topgolf, we have made considerable investments in the Topgolf business that have dramatically expanded its scale, digital capabilities and venue profitability. These investments, combined with the hard work of the Topgolf team, have allowed us to outperform our original growth and free cashflow expectations. Looking forward, we remain convinced that Topgolf is a high-quality, free cash flow generating business with a significant future value-creation opportunity,” said Chip Brewer, Topgolf Callaway Brands president and CEO in a press release. 

The announcement comes about a month after Callaway announced they were going to conduct a “strategic review” of the company after ran 8% drop in sales during quarter two. 

“Today’s announcement is the result of a thorough strategic review conducted by the Board of Directors and the management team. The creation of two independent companies, each with a distinct focus and proven business model, is intended to drive continued momentum in both businesses and deliver value to all our shareholders,” added John Lundgren, Chairman of the Board of Directors of Topgolf Callaway Brands. 

According to the press release, management is developing “detailed separation plans for consideration and final approval by the company’s Board of Directors. 

The split is expected to be final by the second half of 2025, however, there is no assurance regarding time frame.

Splitting Companies 

According to the press release, the Callaway portion of the business will include the existing golf equipment, Toptracer and lifestyle businesses.  

Theses businesses generated about $2.5 billion over the last 12 months. 

Callaway’s top brands will include Callaway, Odyssey, TravisMatthew, OGIO, Toptracer and Jack Wolfskin. 

The Topgolf business will consist of the already existing business, except for Toptracer, which will move over to Callaway, as noted above. 

Topgolf has generated $1.8 billion in the last 12 months. 

“Topgolf is transforming the game of golf and is expected to deliver substantial financial returns over time.  At the same time, Topgolf has a different operating model, capital structure and investment thesis than Callaway, and as a result, the Board has determined that separating Topgolf will best position Topgolf and Callaway for success and maximize shareholder value,” said Brewer.