Callaway Golf to Buy Top-Flite Golf for $125 Million

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Callaway Golf to Buy Top-Flite Golf for $125 Million (Correct)


June 30 (Bloomberg) -- Callaway Golf Co., which makes Big
Bertha and Odyssey golf clubs, will acquire Spalding Holdings
Corp.'s Top-Flite Golf unit for $125 million in cash to boost its
slumping golf ball business.
Callaway, based in Carlsbad, California, will consolidate its
golf equipment manufacturing and research and development
operations once the acquisition is completed, it said in a
statement. The company expects the consolidation to cost $70
million.
Callaway, maker of high-end gear such as the Big Bertha and
Steelhead golf clubs, will gain access to markets for lower and
mid-price clubs with the Top-Flite acquisition, spokesman Larry
Dorman said. Callaway's first-quarter golf ball sales fell to
$13.7 million, a 39 percent decline from a year earlier.
``Callaway should do quite well with it once we get an uptick
in the economy,'' said Art Bonnel, who manages the $80 million
Bonnel Growth Fund, which owns shares of Callaway. ``What they're
doing is eliminating a competitor and giving themselves additional
market share.''
Dorman declined to say how many jobs the company may cut in
consolidating ball, club and research operations. Chicopee,
Massachusetts-based Top-Flite's brands include Top-Flite, Strata
and Ben Hogan.
Callaway will buy most of the golf-related assets of Top-
Flite. The purchase won't include Top-Flite's debt and will be
subject to an antitrust review by U.S. regulators, Callaway said.
Top-Flite, which is majority owned by Oaktree Capital
Management LLC, an investment and buyout company, said it couldn't
survive in the current market. Spalding, which now operates as SHC
Inc. filed for bankruptcy to help facilitate the sale.
Callaway has been searching for ways to stem losses at the
golf ball unit that has had operating losses since 2000, when it
began sales.
Shares of Callaway fell 12 cents to $13.22 in New York Stock
Exchange composite trading. The news was released after the close
of regular U.S. trading.