DELRAY BEACH, Florida – Callaway Golf Company continues to move farther away from its core equipment business and into a golf entertainment company.
The company has completed a $30 million minority investment in Five Iron Golf, a privately-owned, urban indoor golf and entertainment company offering simulator rentals, golf lessons, custom club fittings, social events and a curated food and beverage menu. Callaway will be accounting for the investment on a cost basis. Other terms of the transaction were not disclosed. On the surface, Five Iron Golf appears to be a smaller version of Topgolf, which Callaway acquired in 2021 for $2.6 billion in stock.
Despite some solid sales and earnings numbers, ELY’s stock price has taken a beating in the aftermath of the Topgolf acquisition. Callaway stock, which closed Nov. 1 at $27.11, got a small boost to $28.03 in after hours trading.
“Five Iron Golf has built a strong brand and leadership position in the evolving indoor golf market by creating technology-driven, eye-catching venues appealing to avid golfers, pure entertainment seekers, and everyone in between,’’ said Callaway President Chip Brewer. “This innovative business aligns with Callaway’s belief that the future of golf will be more accessible and inclusive. The partnership includes a non-exclusive marketing agreement that provides Callaway the ability to continue to develop relationships with golfers wherever they engage with the sport and a valuable opportunity for strategic collaboration that will benefit both brands.”
Five Iron Golf was co-founded in 2017 by Jared Solomon, Nora Dunnan, Mike Doyle, and Katherine Solomon in New York City and has expanded to nine domestic venue locations, operating in seven cities and one international franchise venue location in Singapore. Seven additional venue locations are currently under development, including Chicago’s The Loop neighborhood and Seattle’s Capitol Hill neighborhood, which are projected to open in December 2021 and January 2022, respectively.