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PE-backed Topgolf may take a swing at 2020 IPO

The golfing industry’s trendiest driving range operator is considering a 2020 IPO, as it seeks to grow its footprint and expand its offerings—including launching a comedy series.

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The golfing industry’s trendiest driving range operator is considering going public in 2020.

Topgolf has asked investment banks to pitch their possible roles as underwriters in an IPO, according to Reuters, though the report cautioned that nothing has been finalized. The news comes as the company, which operates multitiered driving range facilities that offer food, drinks and music in a nightclub-type atmosphere, seeks to expand its global footprint.

Topgolf has more than 50 locations in the US, three in the UK and another in Australia, and in August, it announced a partnership with Switzerland-based licenser Greenreb that will see it open facilities in Germany, Switzerland, Italy and Austria in the coming years. It’s also said to be interested in further expanding its presence in the US and UK, as well as adding locations in Mexico, Dubai and Canada. It reportedly costs around $15 million to open a Topgolf center, but the venues have proven popular among non-golfers and golfers alike for offering an assortment of games.

Based in Dallas, Topgolf was valued at roughly $2.1 billion in late 2017 when Callaway upped its stake in the business to 14%, worth a reported $290 million. WestRiver Group, an investment group based in the Seattle area, has reportedly been the majority owner in the company since bringing the concept from the UK to the US in 2005, with Callaway subsequently investing in 2006 and Dundon Capital Partners founder Thomas Dundon backing it in 2011. Dundon also owns the NHL’s Carolina Hurricanes.

Growth equity firm Providence Equity Partners made a minority investment in Topgolf in 2016, then chipped in the next year in a round that included existing shareholders and added Fidelity Management to its portfolio of backers. It’s unclear if the company is currently profitable, but it’s continued to expand its offerings.

Earlier this year, Topgolf introduced a lounge concept that will let customers rent out bays with swing simulators in hopes of appealing to urban areas that don’t have the space to house the typically massive driving range facility. And earlier this month, the company’s studio arm announced a partnership with the Will Smith and Jada Pinkett Smith-owned studio Westbrook Media to develop an original comedy series.

The golf industry and private equity are far from foreign to each other. In 2017, KPS Capital Partners acquired TaylorMade, Adams Golf and Ashworth from Adidas for $425 million. That same year, Apollo Global Management took golf club operator ClubCorp private in a deal valued at some $1.1 billion. And in August 2018, former Silver Lake executive Seth Waugh was named CEO of the PGA of America, which is comprised of almost 29,000 teaching pros.

Featured image of Topgolf Las Vegas by Michael Baxter/Courtesy of Topgolf

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    Written by Adam Lewis
    Adam Lewis was a financial writer covering private equity for PitchBook. He covered dealmaking, company and investor news for the PitchBook newsletter and blogs about the intersection of private equity and politics. A graduate of the WSU’s Edward R. Murrow College of Communication, Adam was previously a sportswriter covering the Mariners and Seahawks.
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