Intel stock extends gains after report of possible U.S. government stake
Investing.com -- Topgolf Callaway Brands Corp. (NYSE:MODG) shares fell by 3.5% following the announcement of an agreement to sell its Jack Wolfskin business to ANTA Sports. The deal, valued at a base price of $290 million in cash, is anticipated to close in the late second quarter or early third quarter of 2025, subject to regulatory approvals and customary closing conditions.
The company's President and CEO, Chip Brewer, stated that the sale would allow Topgolf Callaway to concentrate on its core business and enhance financial flexibility ahead of the planned separation of Topgolf from its core operations. Brewer expressed confidence in ANTA Sports as the new steward of the Jack Wolfskin brand and acknowledged the efforts of the Jack Wolfskin team in preparing the business for the sale.
Despite the sale, Topgolf Callaway has not updated its financial guidance. The previous guidance included an estimate for the Jack Wolfskin business of approximately €325 million in revenue and €12 million of Adjusted EBITDA for the full year 2025. The forecast was based on expected revenues of €115 million and an Adjusted EBITDA loss of €18 million for the first half of 2025, with a significant improvement to €210 million in revenue and €30 million of Adjusted EBITDA in the second half of the year.
In response to the news, Truist Director Michael Swartz reiterated a Buy stock rating and a $12.00 price target on MODG. Swartz commented, "To us, this is a clear positive to the story. Investors had never warmed to JW during MODG's 6+ years of ownership and, we believe the nearly $300mm transaction value (implied ~22x '25 EBITDA) is well above what some investors thought the business could fetch."
Goldman Sachs is serving as the financial advisor to Topgolf Callaway, with Latham & Watkins LLP acting as its legal advisor for the transaction. The market's reaction to the sale reflects a complex assessment of the company's strategic divestiture and its impact on the company's future financial structure.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.