Topgolf Callaway Brands completed a series of related transactions in support of a plan to refinance its capital structure, including a seven-year, $1.25 billion senior secured term loan B arranged by Bank of America, JPMorgan Chase, MUFG Securities and Truist Securities as lead arrangers and joint bookrunners. The new term loan was privately placed with institutional investors and will accrue interest at an annual rate of SOFR plus 350, plus an additional 10 basis point credit spread adjustment, and will mature on March 16, 2030
Topgolf used a portion of the proceeds of the new term loan to refinance an existing $432 million term loan B, a $337 million term loan B and a $175 million revolving credit facility, resulting in go-forward cash interest savings of more the $12 million per year on the refinanced debt. The company will use the balance of the proceeds to pay down its existing asset-based lending balances and for general corporate purposes
In tandem with the new term loan, Topgolf also upsized and extended its existing $400 million asset-backed lending revolving credit facility with a new five-year, $525 million senior secured ABL revolving credit facility. Bank of America is leading this facility as administrative agent.
“We are pleased to announce the successful completion of our debt refinancing, which simplifies and strengthens our capital structure while maintaining modest net leverage and increasing our liquidity by over $300 million,” said Brian Lynch, CFO and chief legal officer for Topgolf Callaway Brands, said. “As we assess our capital allocation priorities, we believe that continuing to invest in the growth of our existing business will create the most long-term value for shareholders. In particular, we view the development of 11 new Topgolf venues per year as a highly attractive investment given our track record of delivering 40% to 50% cash-on-cash returns. Through this new capital structure, we will have more financial flexibility and venue financing options to fund the continued growth of the business while also remaining on track to deliver positive free cash flow in 2023.”
