Topgolf Callaway Brands – The debt refinancing, successfully completed to continuing to invest in new venues
March 17, 2023 – Topgolf Callaway Brands has announced the completion of a series of related transactions in support of a comprehensive plan to refinance its capital structure. Through these transactions, the company simplified and unified its financial reporting, extended its debt maturities, and improved liquidity.
“We are pleased to announce the successful completion of our debt refinancing, which simplifies and strengthens our capital structure while maintaining modest net leverage and increasing our liquidity by over $300 million,” said Brian Lynch, Chief Financial Officer and Chief Legal Officer at Topgolf Callaway Brands.
“As we assess our capital allocation priorities, we believe that continuing to invest in the growth of our existing business will create the most long-term value for shareholders. In particular, we view the development of 11 new Topgolf venues per year as a highly attractive investment given our track record of delivering 40% to 50% cash-on-cash returns. Through this new capital structure, we will have more financial flexibility and venue financing options to fund the continued growth of the business, while also remaining on track to deliver positive free cash flow in 2023.”
The $1.25 billion senior secured term loan facility, which was privately placed with institutional investors, will accrue interest at an annual rate of SOFR+350, plus an additional 10 basis point credit spread adjustment, and will mature on March 16, 2030. Bank of America, N.A., JPMorgan Chase Bank, N.A., MUFG Securities Americas Inc., and Truist Securities, Inc. acted as Joint Lead Arrangers and Joint Bookrunners.
The $525 million senior secured ABL revolving credit facility, led by Bank of America, N.A. as Administrative Agent, will mature on March 16, 2028.