Callaway's Tokyo unit acquires remaining 48% stake in Callaway Apparel K.K.
Callaway Golf Company announced 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 1st, 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 JPY2B, or approximately $18M 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. The joint venture began operations on July 1st, 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.