Callaway and Topgolf Initiate the Reset Process

Following swift growth and a decline in venue sales, Topgolf transitions to private equity ownership.

Topgolf Callaway has announced the sale of 60% of Topgolf and Toptracer to private equity company Leonard Green & Partners for $1.1 billion USD. This represents a significant reset and indicates that Callaway is reverting to its core identity as a golf brand, rather than an entertainment conglomerate focused on nightlife and wings.

The agreement follows a merger between Callaway and Topgolf, valued at $2.6 billion USD in an all-stock transaction, which aimed to transform the brand. For a period, it indeed did. Numerous additional Topgolf establishments were inaugurated, transforming the experience into a cultural conduit for the sport. Constructing large stadiums is costly, and the enterprise depends on continuous foot traffic. When sales at the same venue declined in 2023 and early 2024, the stock price subsequently decreased.

Subsequently, the situation more intricate: Topgolf's CEO resigned, a proposed corporate spin-off was deferred, and Callaway faced a critical decision. This sale represents that option. Callaway is expected to receive approximately $770 million USD in cash, which can be utilized immediately to reduce debt, reinforce its core business, invest in equipment and apparel, and even pursue additional acquisitions. Equally significant: Callaway retains a 40% ownership stake in Topgolf. If Leonard Green reverses the ship's course, Callaway will benefit from the potential gains.

Leonard Green is not unfamiliar with this sector, having investments in Troon and Life Time Fitness; hence, the implication is evident: Topgolf possesses potential for further expansion as a lifestyle, social, and sports-entertainment brand. In summary, Callaway is becoming more streamlined once more. Topgolf acquires a new proprietor with financial resources and growth anticipations. The golf industry has acquired a narrative deserving of attention in 2025.