Callaway Golf Company (NYSE:ELY) entered into an agreement to acquire remaining 85.7% stake of Topgolf International, Inc. from Providence Equity Partners L.L.C., Westriver Group, Dundon Capital Partners LLC and others for an enterprise value $2.5 billion on October 27, 2020. Under the terms of the agreement, each share of Topgolf preferred stock and each share of Topgolf common stock that is issued and outstanding will be converted into the right to receive a number of shares of Callaway common stock equal to its pro rata portion of the merger consideration. Callaway currently estimates that it will issue approximately 90 million shares of common stock to the stockholders of Topgolf (excluding Callaway) for outstanding equity of Topgolf, using an exchange ratio based on an equity value of Topgolf of approximately $1.986 billion (or approximately $1.745 billion excluding Topgolf shares currently held by Callaway) and a price per share of Callaway common stock fixed at $19.40 per share. In addition, Callaway will assume Topgolf’s net debt of $555 million. Upon completion of the transaction, Callaway stockholders as of immediately prior to the merger are expected to own approximately 51.5% of the outstanding shares of the combined company on a fully-diluted basis and former Topgolf stockholders (other than Callaway) are expected to own approximately 48.5% of the combined company on a fully diluted basis. Upon completion, Topgolf will become a wholly-owned subsidiary of Callaway. Topgolf will continue to operate from its headquarters in Dallas, Texas. Callaway will pay a fee of $75 million to Topgolf in case Callaway terminates the agreement and Topgolf will pay a fee of $75 million to Callaway in case Topgolf terminates the agreement. Topgolf reported revenues of $1.1 billion, operating loss of $74.2 million and net loss of $114.9 million for the year ended December 29, 2019. Topgolf reported total assets of $2 billion and shareholders deficit of $468.14 million as at December 29, 2019. Upon closing, the combined company’s Board of Directors will consist of 13 directors, including three directors appointed by Topgolf shareholders. Upon consummation of the merger, the executive management team of Callaway is expected to remain unchanged and consist of members of the Callaway executive management team prior to the merger, including Oliver G. (Chip) Brewer III, as President and Chief Executive Officer of Callaway, Brian P. Lynch as Executive Vice President and Chief Financial Officer, Glenn Hickey as Executive Vice President of Callaway Golf, Mark F. Leposky as Executive Vice President, Global Operations and Joe B. Flannery as Executive Vice President, Apparel and Soft Goods. John Lundgren will continue as Chairman of the Board of the combined company, while Erik Anderson will serve as Vice Chairman. Dolf Berle will continue to lead the Topgolf business through a transition period following the close of the transaction, at which time he intends to step down. Oliver G. (Chip) Brewer III, current Director and President and Chief Executive Officer of Callaway, Samuel H. Armacost, Scott H. Baxter, John C. Cushman, III, Laura J. Flanagan, Russell B. Fleischer, John F. Lundgren, Adebayo O. Ogunlesi, Linda B. Segre and Anthony S. Thornley, Current Directors of Callaway and Erik J. Anderson, Thomas G. Dundon and Scott M. Marimow, Current Directors of Topgolf will be combined company’s board of directors. The transaction is subject to approval of the shareholders of both Callaway and Topgolf, regulatory approval, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the registration statement having become effective, shares of Callaway common stock to be issued in the transaction being approved for listing on the New York Stock Exchange, the consummation of Topgolf’s Series H Preferred offering and the receipt by Topgolf of an opinion from Weil, Gotshal & Manges LLP, to the effect that, on the basis of facts, representations, assumptions and exclusions set forth or referred to in such opinion, the merger should constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes. The transaction has been unanimously approved by the Board of Directors of both Callaway and Topgolf. The Board of Directors of Callaway recommend the shareholders to vote for the transaction. Providence Equity Partners L.L.C., Westriver Group and Dundon Capital Partners LLC who beneficially own an aggregate of approximately 62% of the outstanding capital stock of Topgolf have entered support agreement. On November 23, 2020, the FTC granted early termination of the waiting period under the HSR Act with respect to the Merger, effective immediately. A special committee of the Topgolf Board has unanimously determined that the terms of the transaction are fair and in the best interests of Topgolf. A Special Meeting of Stockholders of Callaway will be held on March 3, 2021, solely by means of remote communication in a virtual-only format, commencing at 8:00 a.m., Pacific Time. As of March 3, 2021, the shareholders of Callaway have approved the transaction. The transaction is expected to close in the first quarter of 2021. As of March 1, 2021, the transaction is expected to close on or around March 8, 2021. Goldman Sachs & Co. LLC acted as financial advisor and fairness opinion provider, and, Holly Bauer, Sam Weiner, Sony Ben-Moshe, Ken Askin, JD Marple, Robert Blamires, Robert Frances, Drew Levin, Chris Norton, Jason Cruise, Peter Todaro, Craig M. Garner and Kevin C. Reyes of Latham & Watkins LLP acted as legal advisors to Callaway. Morgan Stanley & Co. LLC and JPMorgan acted as financial advisors to Topgolf. Kevin J. Sullivan, Jeffrey H. Perry, James R. Griffin and David B. Gail of Weil, Gotshal & Manges LLP acted as legal advisors to Topgolf. Computershare Trust Company, NA acted as the registrar and share transfer agent and Innisfree M&A Inc. acted as proxy solicitor to Callaway. Innisfree M&A Inc. will receive a base fee of approximately $0.03 million, plus out-of-pocket expenses. Goldman Sachs & Co. LLC delivered its opinion that the transaction is fair from a financial point of view. Goldman Sachs will receive a transaction fee of $16 million of which $2 million became payable upon the presentation by Goldman Sachs to the Callaway Board or its designee of the results of a study to enable Goldman Sachs to render its opinion as to the fairness from a financial point of view of the financial consideration to be paid in connection with the merger. The PNC Financial Services Group acted as transfer agent for Topgolf and will receive base fee of approximately $25,000, plus document delivery and collection expenses. Callaway Golf Company (NYSE:ELY) completed the acquisition of remaining 85.7% stake of Topgolf International, Inc. from Providence Equity Partners L.L.C., Westriver Group, Dundon Capital Partners LLC and others on March 8, 2021. In connection with the merger, and effective as of the closing date, Callaway granted to 189 employees of Topgolf an aggregate of 385,389 inducement performance stock unit ("PSU") awards (at the target level) and an aggregate of 456,274 inducement restricted stock unit ("RSU") awards. The combined company will be headquartered in Carlsbad, California. Effective immediately prior to the closing of the Merger, the Board approved the Callaway Golf Company 2021 Employment Inducement Plan.