Global Edition

 

Callaway Golf approved as buyer of Top-Flite

11.30am 4th September 2003 - Corporate

Callaway Golf Company (NYSE:ELY) today announced that the U.S. Bankruptcy Court in Wilmington, Delaware, has approved its offer to purchase substantially all of the assets of the Top-Flite Golf Company for $174.4 million in cash and assumption of debt, plus the assumption of certain operating liabilities. The acquired assets will include working capital (inventory and accounts receivable) of approximately $100 million at closing, fixed assets of approximately $44 million at closing, and all golf patents, trademarks and intellectual property. Callaway Golf expects to close the transaction in mid to late September.
Callaway Golf’s proposal calls for the purchase of the Top-Flite, Strata and Ben Hogan brands, as well as the manufacturing facilities in Chicopee, Massachusetts, Gloversville, New York, and Fort Worth, Texas, and the assets of Top-Flite’s subsidiaries in Canada, the
United Kingdom, Sweden, Australia and New Zealand. Callaway Golf will offer employment to Top-Flite golf employees, and accepted virtually all of Top-Flite’s 43 endorsement contracts with tour professionals, including those of U.S. Open Champion Jim Furyk, Ryder Cup Captains
Hal Sutton and Bernhard Langer, Justin Leonard, Lee Trevino, and other high profile professional golfers.
“This is an attractive and exciting acquisition for Callaway Golf and will create substantial value for our shareholders. The transaction will combine Callaway Golf’s position as #1 in woods, irons and putters with Top-Flite’s position as the #2 manufacturer and seller of golf balls worldwide,” said Ron Drapeau, chairman, president and CEO of Callaway Golf. “We fully expect our combined golf ball business to be profitable going forward, ending the profit drain we have experienced from our own golf ball operations since start up.
“In addition, we feel the integration of Callaway Golf and Top-Flite golf ball R&D and patents, combined with low cost, efficient manufacturing operations, should energize both golf ball brands and provide us with opportunities for growth. We also see other opportunities to leverage the Top-Flite and Callaway Golf assets and the talents of all of our employees around the world to grow Callaway Golf, Odyssey, Top-Flite and Ben Hogan sales. This transaction will give us improved access to categories and channels in the U.S. where we have been absent, while also adding size and strength to our international operations in Europe, Canada, Australia and New Zealand.”
The Company will provide more details upon the closing of the transaction, and plans to hold a conference call with securities analysts later in September.
Callaway Golf Company www.callawaygolf.com

       

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