Shares in Topgolf Callaway Brands (MODG) drove nearly 7% further today on reports that it was set to iron out a deal with private equity to buy its Topgolf unit.
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‘Fore!’ Years On
According to an article in the Wall Street Journal, MODG is in talks with PE group Leonard Green, potentially valuing the Topgolf business at around $1 billion.
The potential deal comes more than four years after Callaway acquired Topgolf for roughly $2.66 billion, including the unit’s debt, in an all-stock deal that later prompted the company to change its name.
Earlier this year, Topgolf Callaway’s board said it had decided to keep the Callaway golf equipment and apparel business under one unit. Callaway earned $2.5 billion in sales over the last 12 months through Q2 2024. Meanwhile, Topgolf, which operates state-of-the-art golf courses and generated $1.8 billion in sales over the same period, would run as an independent company.
The Journal said that although talks could result in a deal soon, there is no certainty the discussions will succeed.
Leonard Green, based in Los Angeles, previously acquired a small stake in Topgolf and has provided input to management on the business.
Rough Course
Topgolf operates entertainment venues that combine driving ranges with food, drinks, and social activities, but its growth has slowed in recent years. The company opened eight new locations in 2022, 11 in 2023, four in 2024, and just one so far in 2025.
Indeed, the group’s share price has hit a few bunkers since the 2021 acquisition – see below:
However, in its third-quarter 2025 earnings report, Topgolf announced a 3% year-over-year revenue growth from ongoing business operations, excluding outdoor wear group Jack Wolfskin. The company exceeded its guidance for net revenue and adjusted EBITDA, with Topgolf venues showing positive same venue sales growth. Additionally, the company reported a significant increase in liquidity, up by $391 million year-over-year.
The American golf market is booming. Total golf participation – those who play on- and off-course with a real ball, real club and full swing – climbed to 47.2 million in the U.S., a 5% gain versus 2023 and up 38% on pre-pandemic 2019.
Is MODG a Good Stock to Buy Now?
On TipRanks, MODG has a Moderate Buy consensus based on 4 Buy and 5 Hold ratings. Its highest price target is $14. MODG stock’s consensus price target is $11.63, implying a 3.10% upside.
