Topgolf Callaway to Spin Off Into Two Separate Companies

Topgolf Callaway is planning to split into two companies of its respective namesakes. 

The golf stakeholder announced Wednesday it plans to separate its two primary brands into two distinct and independent companies, as they were before Callaway. One of the game’s top manufacturers, Callaway bought Topgolf in 2021, 15 years after it initially invested in it. 

Golf had been a tough sport to draw younger players, but Topgolf helped make it more appealing by marrying the traditional driving range with a Skee-Ball type game while incorporating a social aspect. The game’s socially distant nature helped it gain traction during the COVID-19 pandemic, but apparently it was not enough to keep the companies together. 

“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, president and CEO of Topgolf Callaway Brands, in a release. 

“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,” he said. 

In August, the company announced it was reviewing its ownership of Topgolf after its growth slowed as consumers became more deliberate with their disposable income. In Wednesday’s release, the company’s board said it is still exploring options to divide the two businesses, but a spin-off to Topgolf shareholders seems to be the main option for now. 

Despite the upcoming split, Callaway will continue to serve as the official equipment partner for Topgolf. The company said it expects the spin-off to be completed by the second half of 2025. Callaway, which also sells apparel for golfers, has done $2.5 billion in revenue over the past year, while Topgolf has generated $1.8 billion in revenue in that same period.