The new company will be called Callaway Golf Company and stock It will have a new bar.
Topgolf Callaway (NYSE:MODG) stock fell on Wednesday, down about 9% After the company announced that it is selling its Topgolf brand.
The news wasn’t unexpected, as reports surfaced last week that something was in the works.
On Tuesday, the reports were confirmed as the company announced it was selling its Topgolf business to a private equity investor. Callaway’s portion will remain a public company called Callaway Golf Company (NYSE: CALY), trading using a new ticker, Kali.
Topgolf, which owns a series of high-tech driving ranges and Toptracer ball-tracking technology, has acquired… Private equity firm Leonard Green & Partners (LGP) for $1.1 billion. LGP bought a 60% stake in the company, so Callaway will own a 40% stake.
Callaway expects to receive approximately $770 million in net proceeds once the transaction is completed Completion in the first quarter of 2026.
“While we considered various alternatives to spin off Topgolf, including a potential spin-off, we received interest from a number of parties.” said Chip Brewer, President and CEO of Topgolf Callaway Brands. “After a robust process and 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.”
Why did it drive sales?
Topgolf Callaway stock fell about 9% Following this announcement, investors will likely be disappointed with the deal for several reasons.
Perhaps one of the reasons was the price. the The companies merged in 2021 when Callaway acquired Topgolf in 2021 for approximately $2.7 billion. About four years later, the tie-up was dissolved, and Callaway received only $1.1 billion, far less than what she paid.
It’s only a 60% stake, which explains some of the difference in price, but perhaps investors were looking for more.
Also, there may be some Dissatisfaction with retaining 40% stake in TopgolfSince the stated goals were to simplify the operating structure and increase the focus on Callaway. The deal certainly does that, but investors were probably hoping for a 100% piece of Topgolf’s business.
“And most importantly The transaction supports our strategy of focusing on the leading golf and active lifestyle equipment platform. “Following the transaction, our continuing brand portfolio will consist of: Callaway, Odyssey, TravisMathew and Ogio. These companies generated revenues of approximately $2 billion over the last 12 months through the third quarter of 2025,” Brewer said.
The company will be well capitalized, enabling it to reinvest, pay down debt and return capital to shareholders, Brewer said.
What does Wall Street think?
Wall Street analysts were Overall mixed on the deal. Texas Capital was disappointed in the deal’s valuation, valuing Topgolf at $2.2 billion, according to Fly.
Analysts at Roth Capital had hoped for an outright sale of Topgolf, but are still generally happy with the deal and believe it will help Callaway increase profits. They reiterated their buy rating and set a price target of $14 on the stock. Topgolf Callaway is currently trading at $9.40 per share.
Analysts at Jefferies were also impressed by the deal, saying the focus on pure golf positions Callaway to benefit from strong winds in the golf industry, the Fly reported. Jefferies set a buy rating at $11 per share Price target.
