Callaway Golf Company acquired OGIO International, Inc. from Michael J. Pratt, David J. Wunderli, David Cartwright, Gary Bowen, Marty Lott, Jeremy Lott, Jordan Lott, and Anthony M. Palma for $75.5 million.
January 11, 2017 at 09:30 am IST
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Callaway Golf Company (NYSE:ELY) acquired OGIO International, Inc. from Michael j. Pratt, David j. Wunderli, David cartwright, Gary bowen, Marty lott, Jeremy lott, Jordan lott, and Anthony m. Palma for $75.5 million in cash on January 11, 2017. Out of total consideration, $2.5 million will be will deposited by Callaway Golf Company into the working capital escrow account and $0.76 million will be deposited into indemnity escrow account as a holdback on closing, as the same may be adjusted as a part of working capital adjustment. The working capital escrow amount will be maintained as security for the payment by the sellers of any post-closing adjustment and the indemnity escrow amount will be maintained as security for the payment by sellers of certain claims for losses by Callaway Golf Company and its successors and permitted assigns against sellers. The consideration is subject to a working capital adjustment. The adjustment amount shall be an amount equal to the estimated closing working capital minus $15.6 million. If closing adjustment is a positive number, the purchase price shall be increased by the amount of the closing adjustment. If the closing adjustment is a negative number, the purchase price shall be reduced by the amount of the closing adjustment. Callaway Golf Company will finance the transaction with cash on hand and borrowings from its existing asset-backed credit facilities. The purchase price values OGIO International at a multiple of approximately 7.6x projected EBITDA of $10 million. The transaction is subject to approval by Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain supply, distribution and license agreement, being entered between OGIO International and SanMar Corporation. After absorbing non-recurring transaction and transition expenses of approximately $7 million, OGIO International is expected to be dilutive by approximately $0.02 to Callaway Golf Company's 2017 earnings per share but is expected to be accretive thereafter. Craig M. Garner, Kevin Reyes, Jeffrey Woodley, Samuel Weiner, Eric Song, Holly Bauer, Michelle Khoury, JD Marple, Gil Ofir, Peter Rosen, Drew Levin, Tad Lipsky and Sydney Smith of Latham & Watkins acted as legal advisors and Simon Furie, Marc Weidner and Nathan Pund of Lazard Ltd. acted as financial advisors to Callaway Golf Company. John G. Weston of Snell & Wilmer acted as legal advisor and Katie Melzer, Joe Pellegrini and Andrew Martin of Robert W. Baird & Co. acted as financial advisors to OGIO International.
Callaway Golf Company (NYSE:ELY) completed the acquisition of OGIO International, Inc. from Michael j. Pratt, David j. Wunderli, David cartwright, Gary bowen, Marty lott, Jeremy lott, Jordan lott, and Anthony m. Palma on January 11, 2017.
Topgolf Callaway Brands Corp. is a golf and active lifestyle company. The Company provides golf entertainment experiences, designs, and manufactures golf equipment, and sells golf and active lifestyle apparel and other accessories through its family of brand names, which include Topgolf, Callaway Golf, Odyssey, TravisMathew, Jack Wolfskin, OGIO, Toptracer and World Golf Tour. Its segments include Topgolf, Golf Equipment, and Active Lifestyle. The Topgolf is a technology-enabled golf entertainment business. Its platform offers open-air golf and entertainment venues as well as its Toptracer ball-tracking technology and digital media platform. The Golf Equipment segment is engaged in designing, manufacturing, and selling a full line of golf equipment, which is comprised of the golf clubs and golf balls product groups. Under Active Lifestyle segment, the Company designs, develops and sells soft good products under the Callaway, TravisMathew, OGIO, and Jack Wolfskin brands.
Callaway Golf Company acquired OGIO International, Inc. from Michael J. Pratt, David J. Wunderli, David Cartwright, Gary Bowen, Marty Lott, Jeremy Lott, Jordan Lott, and Anthony M. Palma for $75.5 million.