Global Edition

 

Callaway acquires Top-Flite

12.20am 1st July 2003 - Corporate

Callaway Golf Company (NYSE:ELY) has announced that it has entered into an agreement with The Top-Flite Golf Company to purchase the major assets associated with Top-Flite’s business, including its manufacturing facilities, the Top-Flite, Strata and Ben Hogan brands, and all golf-related patents and trademarks.

The assets will be acquired free and clear of any existing debt and most other liabilities pursuant to a Chapter 11 petition filed by the Top-Flite Company on 30th June 2003 and subject to approval by the U.S. Bankruptcy Court in Wilmington, Delaware. The total price to be paid by Callaway Golf for the acquired assets will be approximately $125 million, subject to certain adjustments.

Completion of the transaction is contingent upon, among other things, the approval of the Bankruptcy Court and government review under the Hart-Scott-Rodino Premerger Notification Act. Top-Flite business operations will continue as usual during the bankruptcy proceedings. Top-Flite’s international operations are part of the sale but not part of the bankruptcy process.

Upon consummation of the acquisition, Callaway Golf will initiate steps to consolidate its golf ball and golf club manufacturing and R&D operations. Callaway Golf expects to incur charges to earnings of up to $70 million, mostly non-cash, in connection with this process, with the charges to be taken as incurred over the next several months.

Ron Drapeau, chairman, president and CEO of Callaway Golf, said, “Our acquisition of the Top-Flite assets free from the significant debt load that burdened the company should permit us to reverse the recent decline of the Top-Flite brand in the golf ball market. We also believe that our consolidated golf ball operations will provide Callaway Golf and its shareholders with the solution to the profitability drain that has dogged our golf ball business since start up.

“Moreover, the acquisition of the Top-Flite and Ben Hogan brands in golf clubs permits us to participate in categories and channels where the Callaway Golf brand has been absent or had little presence. Overall, we see this as an opportunity to compete effectively in a broad range of golf equipment business segments. We have every reason to believe that we will receive all needed approvals to complete the transfer of these Top-Flite assets to Callaway Golf later this year.”

Jim Craigie, CEO of Top-Flite said, “The proposed sale of our assets to Callaway Golf will allow Top-Flite to emerge as a stronger competitor, maximizing the value of our brands to the benefit of our employees and other stakeholders. By becoming part of Callaway Golf we can increase marketing support behind our well-known brands and innovative technology, as proven by recent wins at the U.S. Open, the Senior PGA Championship and the British Masters. We have the ultimate respect for Callaway Golf’s brand, market position, management team and financial performance, and look forward to entrusting them with these great brands and valuable assets going forward.”

Further details on the acquisition will be disclosed as the process in Bankruptcy Court proceeds. Management plans to cover this topic further during the regularly scheduled investor conference call set for 5:00 p.m. EDT on July 17, 2003.

Callaway Golf Company www.callawaygolf.com

       

You can see the latest news letter here.

Follow us on Twitter and LinkedIn.            

Use the buttons above to control the search results you want.

Prefixing a search term with a hyphen will exclude results matching that term.
For example 'green -greenkeeper' will return results containing 'green' but not 'greenkeeper'.