Callaway Golf has issued a formal statement ruling out suggestions in an English-language South Korean newspaper that a similarly South-Korean based strategic investor is looking to purchase the golfing equipment giant.
If it were true, the sale of current American owned company would see all three of golf’s largest brands owned by South Korean companies after Titleist was acquired by KRX-listed FILA Holdings Corp. in 2011 and a decade later TaylorMade was bought by the Seoul-based firm Centroid Investment Partners LC in 2021.
The Chosun Daily reported that, 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.
The newspaper says Callaway Golf is currently valued at around $2.98 billion.
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 newspaper also reports the major shareholers will spin off Topgolf, a subsidiary of Topgolf Callaway Brands Corp., and only sell Callaway Golf. As we know, Topgolf is a premier entertainment venue featuring indoor golf games, with a full-service bar and 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.
When asked by Golf.com, a Callaway representative issued the following statement: “While it is our long-standing practice not to respond to market rumors and speculation, in light of the unusual market activity today and a recent media report in Korea about discussions of a possible sale of the company or its golf equipment business, we confirm that we are not aware of any such discussions. We do not intend to comment further on this matter and we assume no obligation to make any further announcements or disclosures should circumstances change.”
Topgolf Callaway CEO Chip Brewer emphasized that Callaway equipment would remain a big part of the message at Topgolf, particularly the Chrome Tour golf ball. “The business has performed exceptionally well from a brand perspective in 2023,” he said. “Our U.S. dollar market share positioned us as the No. 1 club brand and the No. 2 golf ball brand. In clubs alone, we were No. 1 in total clubs, drivers, fairway woods, hybrids and irons.”
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