Finance

Topgolf seeks to hire banks for IPO

Key Points
  • U.S. golfing center operator Topgolf International is in talks with investment banks about hiring underwriters for an initial public offering, sources said.
  • Among Topgolf's top investors are investment firm WestRiver Group, sporting goods company Callaway Golf, hockey team Carolina Hurricanes majority owner Thomas Dundon and buyout firm Providence Equity Partners.
  • Topgolf uses microchips in its balls to track distance and accuracy across a variety of golf games, and also offers food and drinks to golfers.
Topgolf combines golf with entertainment. Patrons can play competitive games while enjoying the atmosphere of a bar or nightclub.
Source: Topgolf

U.S. golfing center operator Topgolf International is in talks with investment banks about hiring underwriters for an initial public offering, people familiar with the matter said.

The IPO would come as Topgolf seeks capital to open new venues in the United States, Britain, Mexico, Dubai and Canada. It operates 52 U.S. golfing centers, three in Britain and one in Australia.

Topgolf has invited investment banks to pitch for roles on the IPO, which is planned for next year, one of the sources said.

The sources cautioned that the IPO plans had not been finalized and requested anonymity because the matter is confidential. Topgolf declined to comment.

Among Topgolf's top investors are investment firm WestRiver Group, sporting goods company Callaway Golf, Carolina Hurricanes majority owner Thomas Dundon, and buyout firm Providence Equity Partners.

When Callaway increased its investment in Topgolf in December 2017, it valued its 14% stake at $290 million, suggesting an equity valuation for Topgolf of $2.1 billion. Topgolf's estimated valuation currently could not be established.

Topgolf uses microchips in its balls to track distance and accuracy across a variety of golf games. It also offers food and drinks to golfers.

Twin brothers Steve and Dave Jolliffe originated the concept in 2000 in Watford, just outside London.

The golfing sector has proved popular with investment firms in recent years. Private equity firm KPS Capital Partners acquired golf equipment and clothing brands TaylorMade, Adams Golf and Ashworth from Adidas two years ago for $425 million.

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Key Points
  • CNBC's Jim Cramer says that too many initial public offerings coming to Wall Street pose a greater risk to the stock market than the U.S.-China trade war.
  • Many companies with billion-dollar-plus valuations at the time of their 2019 IPOs got cool receptions on Wall Street.