Steve Pike

SR. Writer

Steve “Spike” Pike is a lifelong journalist whose career covers Major League Baseball, the NFL, and college basketball. For the past 26 years, Spike has been one of the more respected voices in the golf and travel industries, working for such publications as Golfweek, Golf World, and Golf Digest for The New York Times Magazine Group. In 1998, Spike helped launch the PGA.com website for the PGA of America. As a freelance travel and golf writer, Spike’s travels have taken him around the world. He has played golf from Pebble Beach to St. Andrews, walked the Great Wall of China, climbed an active volcano in the Canary Islands, been on safari in South Africa, and dived with sharks off Guadalupe, Baja California.

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TopGolf Callaway Split

In a significant move, Topgolf Callaway Brands (NYSE: MODG) today announced that its Board of Directors intends to “pursue the separation’’ of its business into two independent companies: Callaway, in golf equipment with a highly complementary Active Lifestyle business, and Topgolf, its golf entertainment business. This strategic move is expected to have a profound impact on the values of both companies.

The announcement came after today’s trading on Wall Street closed. MODG closed at $10.76 per share after opening at $10.33. In after-hours trading, the company’s stock was trading at above $11 per share.

The company said it expects to effect the separation through a spin-off of the Topgolf business to Topgolf Callaway Brands’ shareholders in a transaction intended to be tax-free to it and its shareholders for U.S. federal income tax purposes.

While the Company expects that a spin-off of Topgolf into a stand-alone public company is the most likely separation path, the Company is committed to evaluating other options for separation to ensure the maximization of shareholder value.

“Over the last decade-plus, we have transformed Callaway into the #1 brand in golf equipment while building a successful and complementary apparel and accessory business,’’ Topgolf Callaway Brands President/CEO Chip Brewer said. “We believe this business, on a stand-alone basis, will be well understood and valued by the market.

“Since our merger with Topgolf (in March 2021), we have made considerable investments in the Topgolf business that have dramatically expanded its scale, digital capabilities, and venue profitability. These investments, combined with the hard work of the Topgolf team, have allowed us to outperform our original growth and free cash flow expectations.

“Looking forward, we remain convinced that Topgolf is a high-quality, free cash flow generating business with a significant future value creation opportunity. 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. As a result, the Board has determined that separating Topgolf will best position Topgolf and Callaway for success and maximize shareholder value.’’