CARLSBAD, Calif., Jan. 4, 2019 /PRNewswire/ -- Callaway Golf
Company (NYSE: ELY) announced today that it has completed the
previously announced acquisition of Jack Wolfskin for €418 million,
or approximately $476 million
assuming a 1.140 Euro to US Dollar
conversion rate, subject to a working capital adjustment.
Jack Wolfskin is an international, premium outdoor apparel,
footwear and equipment brand. The company designs premium products
targeted at the active outdoor and urban outdoor customer
categories. The acquisition furthers Callaway's push into the
active lifestyle category after its successful 2017 acquisitions of
TravisMathew and Ogio. Post-acquisition, Jack Wolfskin will
continue to operate out of its Idstein, Germany headquarters.
"We are very excited to have completed this acquisition and have
the Jack Wolfskin brand as part of the Callaway portfolio,"
commented Chip Brewer, President and
Chief Executive Officer of Callaway. "We believe Jack Wolfskin fits
extremely well with our current brands and furthers our stated plan
of strategic investments in complementary areas. Jack Wolfskin
provides an innovative product offering with long-term synergies to
the existing soft goods portfolio. We look forward to
partnering with the Jack Wolfskin management team to maximize this
brand's growth potential."
"We are thrilled to be joining Callaway's growing portfolio of
premium, active lifestyle brands," said Jack Wolfskin's Chief
Executive Officer Melody Harris-Jensbach. "The Callaway team has
proven over many years that they are great innovators and brand
builders. We are excited to have them invest in our brand and are
eager to start working with them."
Callaway financed the transaction with a $480 million Term Loan B facility, which was led
by BofA Merrill Lynch and JP Morgan Securities LLC. The facility
has a seven-year term, subject to certain prepayment rights, and
bears interest at a rate of LIBOR plus 4.50%. The Term Loan B
market weakened during the period the Company marketed the loan to
investors and therefore the estimated annual financing costs will
be approximately $0.05 per share
higher than previously estimated. As a result, Callaway currently
estimates that this transaction is expected to be approximately
$0.11 per share dilutive for full
year 2019 and slightly accretive in 2020, both on a non-GAAP basis,
which excludes non-recurring transaction costs and non-cash
purchase accounting adjustments. The Company intends to provide
further guidance on a GAAP basis once it has completed its purchase
accounting adjustments. Full year 2019 adjusted EBITDA, which
excludes transaction costs and non-cash purchase accounting
adjustments, is still estimated to be approximately $33 million for the Jack Wolfskin business. The
Company remains excited about adding this premium brand to its
portfolio and the strategic benefits and long-term potential this
acquisition provides.
Latham & Watkins LLP acted as legal counsel to Callaway for
the acquisition and Gibson Dunn & Crutcher acted as legal
counsel to Callaway for the Term Loan B facility. JP Morgan
Securities LLC acted as exclusive financial advisor to Callaway for
the acquisition. Kirkland & Ellis International LLP acted as
legal counsel and Houlihan Lokey as
exclusive financial advisor to Outdoor Holdings SCA - the holding
company of Jack Wolfskin. THM Partners acted as director of and
advisor to the Jack Wolfskin Group.
Forward-Looking Statements
Statements used in this press release that relate to future
plans, events, financial results, performance or prospects, and
statements relating to the expected benefits of the Jack Wolfskin
transaction, including future synergies and growth opportunities,
and the estimated financial results and sales and earnings
contribution from Jack Wolfskin, are forward-looking statements as
defined under the Private Securities Litigation Reform Act of 1995.
These statements are based upon current information and
expectations. Accurately estimating the forward-looking statements
is based upon various risks and unknowns, including unanticipated
difficulties or expenditures relating to the transaction or the
realization of the anticipated synergies and growth opportunities;
the response of customers, suppliers and others to the announcement
of the transaction; potential difficulties in employee retention as
a result of the transaction; consumer acceptance of and demand for
the Company's products; the level of promotional activity in the
marketplace; unfavorable weather conditions; future consumer
discretionary purchasing activity, which can be significantly
adversely affected by unfavorable economic or market conditions;
future retailer purchasing activity, which can be significantly
negatively affected by adverse industry conditions and overall
retail inventory levels; and future changes in foreign currency
exchange rates and the degree of effectiveness of the Company's
hedging programs. Actual results may differ materially from those
estimated or anticipated as a result of these risks and unknowns or
other risks and uncertainties. For additional information
concerning these and other risks and uncertainties that could
affect these statements, see Callaway's Annual Report on
Form 10-K for the year ended December 31, 2017 as
well as other risks and uncertainties detailed from time to time in
Callaway's reports on
Forms 10-K, 10-Q and 8-K subsequently
filed with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Callaway
undertakes no obligation to republish revised forward-looking
statements to reflect events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events.
About Callaway Golf
Through an unwavering commitment to innovation, Callaway Golf
Company (NYSE: ELY) creates products designed to make every golfer
a better golfer. Callaway Golf Company manufactures and sells golf
clubs and golf balls, and sells bags, accessories and apparel in
the golf and lifestyle categories, under the Callaway Golf®,
Odyssey®, OGIO, and TravisMathew brands worldwide. For more
information please visit www.callawaygolf.com, www.odysseygolf.com,
www.ogio.com, and www.travismathew.com.
About Jack Wolfskin
Jack Wolfskin is one of the leading providers of functional
outdoor clothing, footwear and equipment in Europe and the largest franchisor in the
German specialist sports retail market. JACK WOLFSKIN articles are
currently available in more than 3,000 points of sale across the
globe. JACK WOLFSKIN articles feature a high degree of
functionality, user-friendliness and innovation. In recent years,
JACK WOLFSKIN successfully introduced numerous material and product
innovations. The company is a member of Fair Wear Foundation and a
bluesign® system partner. JACK WOLFSKIN has also been a member of
the "Zero Discharge of Hazardous Chemicals" initiative since 2012.
Jack Wolfskin is the official provider of apparel for the Innsbruck
Alpine School. For more information please visit
www.jack-wolfskin.com
CONTACT:
Brian Lynch
Patrick Burke
(760) 931-1771
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SOURCE Callaway Golf Company