CARLSBAD–(PRNewswire)–Callaway Golf Company said June 3 that its Tokyo-based subsidiary, Callaway Golf K.K., acquired the remaining 48% stake in Callaway Apparel K.K., an apparel joint venture between Callaway and its long-time partner, TSI Groove & Sports Co, Ltd.
Effective June 1 Callaway Golf K.K. owns 100% of Callaway Apparel K.K., which designs, manufactures and sells Callaway branded apparel, footwear, and headwear in Japan.
Callaway Golf K.K. acquired the 48% minority interest for 2 Billion Yen, or approximately $18 million based upon a 109 US Dollar to Yen exchange rate. This purchase price values Callaway Golf K.K. at approximately 9 times 2019 projected EBITDA.
“We are pleased with the success of our apparel business in Japan,” commented Chip Brewer, President and Chief Executive Officer of Callaway Golf Company. “We have a great relationship with TSI Groove & Sports, but acquiring full ownership of this business provides our Asia team with a platform and the flexibility to support a fully integrated, multi-branded soft goods business in Asia. This acquisition is consistent with our strategy to accelerate growth in our soft-goods business across brands and geographies.”
The joint venture began operations on July 1, 2016 with its headquarters in Tokyo, Japan. Callaway owned 52% of the joint venture and TSI Groove & Sports Co, Ltd. owned 48%. TSI had previously partnered with Callaway as a licensee, helping to successfully launch and grow that business since 2002.
Callaway Golf Company reported that this transaction would not affect the company’s prior financial guidance for 2019.