Callaway Golf Company has prevailed in the auction to purchase substantially all of the assets of the Top-Flite Golf Company. The acquisition was approved by the U.S. Bankruptcy Court in Wilmington, DE on Thursday.
The deal is worth $174.4 million in cash and assumption of debt, plus the assumption of certain operating liabilities. The acquired assets will include working capital (inventory and accounts receivable) of approximately $100 million at closing, fixed assets of approximately $44 million at closing, and all golf patents, trademarks and intellectual property.
Callaway Golf expects to close the transaction in mid to late September.
Callaway Golf's proposal calls for the purchase of the Top-Flite, Strata and Ben Hogan brands, as well as the manufacturing facilities in Chicopee, Massachusetts, Gloversville, New York, and Fort Worth, Texas, and the assets of Top-Flite's subsidiaries in Canada, the United Kingdom, Sweden, Australia and New Zealand. Callaway Golf will offer employment to Top-Flite golf employees, and accepted virtually all of Top-Flite's 43 endorsement contracts with tour professionals.
Top-Flite filed for Chapter 11 bankruptcy protection in July after announcing that it would be acquired by Callaway for $125 million. adidas had a bid posted that was reportedly in the $135 million range.
Callaway was appointed the “stalking horse” in the auction process, but had its own break-up fee and other stipulations nullified by the bankruptcy court.
Top-Flite was able to choose the bid that had the most likely chance to close. The adidas bid reportedly had more stipulations regarding endorsed player contracts and the existing ball manufacturing facilities owned by Top-Flite.
“We can confirm that the bid by Callaway Golf Company was determined by Top-Flite to be superior to any other bid for the company's assets”, Top-Flite reported in a release early Thursday, while indicating that there was a “spirited” bidding process for the brand.
In early reports out of Germany on Thursday, adidas-Salomon AG said that it will turn to “organic growth” in the golf market, focusing on its TaylorMade, adidas Golf and Maxfli brands.