Daily News: January 4, 2019

BofAML, JP Morgan Lead $480MM Term Loan for Calloway/Jack Wolfskin Merger


Bank of America Merrill Lynch and JP Morgan Securities led a seven-year, $480 million term loan B facility to support Calloway Golf’s acquisition of outdoor apparel and equipment brand Jack Wolfskin for €418 million ($476 million).

The facility will bear interest at a rate of LIBOR plus 4.50%, with estimated annual financing costs of 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 acquisition of Jack Wolfskin will also further Callaway’s push into the active lifestyle category after its 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, Callaway president and CEO. “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 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.”

Latham & Watkins acted as Callaway’s legal counsel and JP Morgan Securities as exclusive financial advisor for the acquisition, while Gibson Dunn & Crutcher acted as legal counsel on the term loan. Kirkland & Ellis acted as legal counsel and Houlihan Lokey as exclusive financial advisor to Outdoor Holdings, the holding company of Jack Wolfskin. THM Partners acted as director of and advisor to the Jack Wolfskin Group.