Topgolf Callaway Brands Corp. (NYSE: MODG) completed the sale of a 60% interest in its Topgolf and Toptracer businesses to private‑equity firm Leonard Green & Partners, L.P. The transaction, effective January 1, 2026, was announced on January 5, 2026 and values the unit at roughly $1.1 billion. Net cash proceeds of about $800 million, after working‑capital adjustments and transaction expenses, were used to repay $1 billion of outstanding borrowings under the company’s term loan B facility, reducing total debt to approximately $480 million. The company also launched a new $200 million share‑repurchase program that can be exercised at any time in accordance with its credit facilities.
The sale marks a strategic pivot that separates the high‑growth, capital‑intensive entertainment segment from the more stable golf‑equipment and active‑lifestyle businesses. Management said the transaction will allow both entities to operate as focused, well‑capitalized pure‑play companies while preserving a 40% retained stake in Topgolf for future value creation. “I am very pleased to report today that we have completed the sale of a majority interest in Topgolf,” CEO Chip Brewer said, adding that the deal “positions both companies as well‑capitalized, focused, pure‑play businesses that should thrive in their respective spaces.”
Financially, the deal delivers a sharp deleveraging benefit. The $1 billion debt repayment cuts the company’s debt‑to‑EBITDA ratio from 6.8× to the mid‑4× range for 2026, while the $800 million cash infusion boosts liquidity and provides a buffer for future capital allocation. The new share‑repurchase program signals management’s confidence in the company’s intrinsic value and offers a mechanism to return capital to shareholders. The retained 40% stake in Topgolf positions the company to benefit from the entertainment segment’s growth trajectory under Leonard Green’s majority ownership.
Segment context underscores the rationale for the sale. In Q4 2024, the company recorded a $1.452 billion goodwill impairment related to Topgolf, reflecting valuation pressures on the entertainment unit. Despite this, the core golf‑equipment segment has shown resilience, with a strong gross margin of 63.31% and an operating margin of 4.96% in early 2026. The separation allows the core business to focus on its established product lines while Topgolf can pursue expansion without the constraints of a diversified conglomerate structure.
Market reaction to the announcement was positive, with the company’s shares trading above pre‑announcement levels in pre‑market sessions. Investors responded to the significant debt reduction and the new share‑repurchase authorization, both of which improve the company’s balance sheet and signal a commitment to shareholder returns. The transaction also aligns with a broader industry trend of separating high‑growth entertainment units from legacy equipment businesses to unlock value.
Looking ahead, the company will change its corporate name back to Callaway Golf Company and its ticker to CALY on January 15, 2026, reinforcing its renewed focus on golf equipment and apparel. The sale and subsequent rebranding are expected to sharpen strategic priorities, improve capital efficiency, and position both entities for sustainable growth in their respective markets.
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