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LONDON, UK / ACCESSWIRE / August 7, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Callaway Golf Co. (NYSE: ELY) ("Callaway"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=ELY. The Company announced on August 03, 2017, that it has signed an agreement to acquire TravisMathew, LLC, a high-growth golf and lifestyle apparel company. The purchase price of the all-cash transaction is approximately $125.5 million, subject to a working capital adjustment. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Terms of the Acquisition

Callaway is likely to finance the transaction with cash on hand and borrowings from its asset-backed credit facilities. The transaction, expected to be finalized in Q3 2017, is subject to customary closing conditions and regulatory approvals. Following the acquisition, TravisMathew's team will continue to operate in their Huntington Beach, California headquarters.

Transaction Expected to be Slightly Accretive to 2018 Earnings

Commenting on the acquisition, Chip Brewer, President and Chief Executive Officer of Callaway, expressed:

"We are very excited about this acquisition. With its golf heritage, culture of product excellence and double-digit growth in the golf and lifestyle apparel business, TravisMathew is a great fit with our business, brands, culture, and our strategy to grow in areas tangential to golf. This acquisition, once completed, is expected to be slightly accretive to earnings in 2018 and create significant value for our shareholders over the long-term. We look forward to working with the TravisMathew management team to maximize this brand's growth potential."

Financial Insights of the Transaction

• The purchase price of the acquisition values TravisMathew at a multiple of approximately 11.8 times projected 2017 full year adjusted EBITDA. Callaway also expects to realize significant value from potential tax benefits associated with the transaction.

• Considering the transaction closes in Q3 2017, TravisMathew's net sales are projected to be in the range of $55 million - 60 million this year, of which approximately $10 million - 15 million will contribute to Callaway's 2017 second half financial results.

• Including $5 million of estimated transaction and incremental non-cash expenses resulting from the acquisition purchase accounting adjustments, TravisMathew is expected to be approximately $0.04 dilutive to Callaway's 2017 earnings per share.

• The transaction is also expected to be slightly accretive in 2018, after taking into account anticipated financing costs and incremental investment in the business to support future growth.

Financial and Legal Advisors

Lazard is serving as the financial advisor and Latham & Watkins LLP is acting as legal counsel to Callaway, while Baker & Hostetler LLP is serving as legal counsel and Moss Adams Capital LLC and Optivest IB are providing financial advice to TravisMathew.

About Callaway Golf Co.

Incorporated in 1982, Callaway is an American global sporting goods company that designs, manufactures, markets, and sells golf equipment, golf accessories, and golf lifestyle-related products in more than 70 countries worldwide. Based in Carlsbad, California, the Company is the world's largest maker of golf clubs and consists of four powerful brands, Callaway, Odyssey, Toulon Design, and OGIO.

Last Close Stock Review

On Friday, August 04, 2017, the stock closed the trading session at $13.50, climbing 8.26% from its previous closing price of $12.47. A total volume of 3.84 million shares have exchanged hands, which was higher than the 3-month average volume of 876.67 thousand shares. Callaway Golf's stock price soared 4.41% in the last three months, 31.07% in the past six months, and 22.73% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 23.18%. The stock is trading at a PE ratio of 7.33 and has a dividend yield of 0.30%. At Friday's closing price, the stock's net capitalization stands at $1.27 billion.

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SOURCE: Pro-Trader Daily