Callaway Golf is selling off most of Topgolf on the cheap - and ditching the name

By Tomi Kilgore

The sale of 60% of its Topgolf stake comes less than five years after the merger closed and at a valuation of about half what it was at that time

The golf company Callaway is selling off 60% of its stake in its Topgolf business at a significantly discounted valuation and changing its own name back to what it was before the business was purchased.

After nearly five years of pain for investors, Callaway is selling off control of Topgolf to private equity - and at a significantly discounted valuation.

The company (MODG) isn't just selling 60% of its Topgolf stake. It will also change its name back to Callaway Golf Co. when the sale is completed - as if the acquisition of Topgolf never happened. The stock's ticker symbol will change to "CALY." The company changed to the current name of Topgolf Callaway Brands Corp. in September 2022, 18 months after the merger closed in March 2021.

The announcement of the stake sale marks a change in plan for Callaway, as it comes a little more than a year after the company had said it intended to separate Topgolf and create two independent companies.

"As we considered various alternatives to separate Topgolf, including a potential spin-off transaction, we received interest from a number of parties," said Chief Executive Chip Brewer.

The stock dropped 5.4% on Tuesday. Since the Topgolf purchase closed, it has tumbled about 64%. Shares of rival golf-products seller Acushnet Holdings Corp. (GOLF), the parent of the Titleist brand, have soared about 90% over the same time.

Under the terms of the deal, Callaway will sell a 60% stake in the sports entertainment and gaming-venue operator to funds managed by Leonard Green & Partners. The company expects to receive about $770 million in net proceeds from the stake sale, which values Topgolf at about $1.1 billion.

When the purchase of Topgolf was announced in October 2020, the terms of the all-stock deal implied a $2 billion valuation of the company.

"After a robust process and a thorough evaluation of a range of alternatives, we believe this sale is the best outcome for our shareholders, as well as our employees and other stakeholders," CEO Brewer said. "This transaction is highly attractive in that it provides the company with both significant proceeds and substantial upside in the continued growth of Topgolf."

One of the problems Callaway had seen with the Topgolf business was that the venues would rack up encouraging sales figures in the first year after opening, but sales would often drop off as the cost for a typical family would make repeat visits a challenge.

But in the third-quarter report released earlier in November, the company said the Topgolf segment beat expectations for both revenue and underlying profitability. And Brewer had said, according to an AlphaSense transcript of a call with analysts, that same-venue sales, or sales at venues open more than a year, made an "all-important transition" to positive year-over-year growth.

The improvement in the business may have been part of Callaway's decision to keep a stake in Topgolf rather than completely separate the business.

The deal is expected to close in the first quarter of 2026, which is when the name and ticker symbol will change. With the proceeds from the stake sale, Brewer said the company can reinvest in its business, pay down debt and repurchase shares.

-Tomi Kilgore

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11-18-25 2013ET