CARLSBAD, Calif., Aug. 3, 2017 /PRNewswire/ -- Callaway Golf
Company (NYSE:ELY) announced today it has entered into a definitive
agreement to acquire TravisMathew, LLC, a high-growth golf and
lifestyle apparel company, for $125.5
million in an all-cash transaction, subject to a working
capital adjustment.
"We are very excited about this acquisition," commented
Chip Brewer, President and Chief
Executive Officer of Callaway Golf Company. "With its golf
heritage, culture of product excellence and double-digit growth in
the golf and lifestyle apparel business, TravisMathew is a great
fit with our business, brands, culture and our strategy to grow in
areas tangential to golf. This acquisition, once completed, is
expected to be slightly accretive to earnings in 2018 and create
significant value for our shareholders over the long-term. We look
forward to working with the TravisMathew management team to
maximize this brand's growth potential."
The acquisition is subject to customary closing conditions,
including securing regulatory approvals, and is expected to close
in the third quarter of 2017. Post-acquisition, TravisMathew will
continue to operate out of its Huntington
Beach, California headquarters.
The purchase price values TravisMathew at a multiple of
approximately 11.8 times projected 2017 full year adjusted EBITDA.
Callaway also expects to realize significant value from potential
tax benefits associated with the transaction.
In 2017, TravisMathew's net sales are expected to be in the
range of $55-60 million, of which
approximately $10-15 million will
contribute to Callaway's 2017 second half financial results
assuming the transaction closes in the third quarter of 2017.
Including approximately $5 million of
estimated transaction expenses and incremental non-cash expense
resulting from the acquisition purchase accounting adjustments,
TravisMathew is expected to be approximately $0.04 dilutive to Callaway's 2017 earnings per
share but is expected to be slightly accretive in 2018 after taking
into account anticipated financing costs and incremental investment
in the business to support future growth.
Callaway intends to finance the transaction with cash on hand
and borrowings from its asset-backed credit facilities. Latham
& Watkins LLP acted as legal counsel and Lazard acted as
financial advisor to Callaway. Baker & Hostetler LLP acted as
legal counsel and Moss Adams Capital LLC and Optivest IB acted as
financial advisor to TravisMathew.
Forward-Looking Statements
Statements used in this
press release that relate to future plans, events, financial
results, performance or prospects, including statements relating to
the expected benefits of the TravisMathew transaction, including
the impact on earnings, revenues and EBITDA, operational synergies,
diversification and growth opportunities, potential tax benefits
and the future business and prospects of Callaway and TravisMathew
are forward-looking statements as defined under the Private
Securities Litigation Reform Act of 1995. These statements are
based upon current information and expectations. Accurately
estimating the forward-looking statements is based upon various
risks and unknowns, including unanticipated difficulties or
expenditures relating to the transaction or the realization of the
anticipated synergies and other benefits; the response of
customers, suppliers and others to the announcement of the
transaction; potential difficulties in employee retention as a
result of the transaction; Callaway's future performance and
its ability to realize the expected tax benefits; consumer
acceptance of and demand for the company's products; the level of
promotional activity in the marketplace; unfavorable weather
conditions; future consumer discretionary purchasing activity,
which can be significantly adversely affected by unfavorable
economic or market conditions; future retailer purchasing activity,
which can be significantly negatively affected by adverse industry
conditions and overall retail inventory levels; and future changes
in foreign currency exchange rates and the degree of effectiveness
of the company's hedging programs. Actual results may differ
materially from those estimated or anticipated as a result of these
risks and unknowns or other risks and uncertainties. For additional
information concerning these and other risks and uncertainties that
could affect these statements, see Callaway's Annual Report on Form
10-K for the year ended December 31,
2016 as well as other risks and uncertainties detailed from
time to time in Callaway's reports on Forms 10-K, 10-Q and 8-K
subsequently filed with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Callaway undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events.
About Callaway Golf
Through an unwavering
commitment to innovation, Callaway Golf Company (NYSE:ELY) creates
products designed to make every golfer a better golfer. Callaway
Golf Company manufactures and sells golf clubs and golf balls, and
sells bags, accessories and apparel in the golf and lifestyle
categories, under the Callaway Golf®, Odyssey®, and OGIO brands
worldwide. For more information please visit
www.callawaygolf.com, www.odysseygolf.com and
www.ogio.com.
About TravisMathew
Founded in 2007, TravisMathew is
an iconic men's sportswear brand with premium domestic distribution
in better department stores, high-end country clubs, resorts and
TravisMathew's experiential retail stores. TravisMathew draws its
inspiration from all aspects of Southern
California culture and lifestyle. With a focus on constant
innovation and extraordinary quality, TravisMathew designs and
sells premium men's apparel for work and play. TravisMathew is
throwing a party, and you're invited. For more information please
visit www.travismathew.com.
Contact:
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Brian
Lynch
|
|
Patrick
Burke
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(760)
931-1771
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SOURCE Callaway Golf Company