Can Topgolf Become Callaway's Golden Goose?
Callaway (NYSE: ELY) is known as one of the premier golf brands in the world. It consistently ranks in the top five or higher in golf clubs and balls sold worldwide, with its wide range of woods, irons, and putters. However, the golf equipment market hasn't been the best industry to be in over the past decade, with worldwide equipment sales actually declining from 2007 to 2019. This has led Callaway to diversify its business, acquiring apparel brands such as TravisMatthew and Jack Wolfskin in recent years.
To further push outside of its core equipment market, Callaway recently announced a merger with entertainment company Topgolf, issuing 90 million shares (worth around $2.5 billion at the current share price) to complete the transaction. The combined company currently has a market cap of $5.25 billion and will be managed by Callaway CEO Chip Brewer.
Here's why investors should be excited about the Topgolf merger, and why it could drive growth for Callaway over the next decade and beyond.
Source Fool.com
