Callaway Completes Jack Wolfskin Acquisition

Callaway Golf Company 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. The acquisition furthers Callaway’s push into the active lifestyle category after its 2017 acquisitions of TravisMathew and Ogio, said the company. 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 CEO 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 CEO 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.”

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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.

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.

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