Callaway Golf purchases bag/apparel manufacturer Ogio for $75.5 million in cash
Callaway Golf announced today that it has purchased the luggage, golf bag and golf apparel brand Ogio International for $75.5 million in cash.
In today’s press release, Callaway Golf indicated that it expects Ogio to contribute “approximately $45 million in revenue” to the company in 2017.
“We believe this acquisition aligns well with our stated goal of strategically developing growth in tangential areas,” said Callaway Golf president and CEO Chip Brewer. “There is a robust strategic fit between the companies; both are strong brands with a sports heritage that share a passion for creating high-quality, performance-driven products.”
Formed 30 years ago after founder Michael J. Pratt developed a sports locker tote bag called the Travel Cube, Ogio (the name stands for “our gear is organized”) became known in golf circles for its unique problem-solving golf bag designs. Notable technologies included the rugged “SLED” (an acronym that stands for Structural Load Equalizing Deck) feature on its rolling luggage and golf travel bags, a hard plastic base and back panel that adds durability and structure. There was also the ZPB (for “zipperless ball pocket”), a pocket with a hinged opening that allowed users to open the pocket with one hand. Ogio also redesigned its golf bags top opening to create easier access, and in 2015 debuted the Silencer, a bag top that locked clubs in place at both the top and bottom of the bag to prevent the clubs from rattling against each other while riding in a cart.
Ogio also has been a player in skateboarding, motocross and BMX, including sponsoring teams of riders in all three sports. It also has an extensive line of backpacks and work bags, as well as the athletic bags the company was founded on.
Over the last five years, it’s branched out to golf apparel, and sponsors four PGA Tour and Web.com players, including Aaron Baddeley and Kevin Streelman. Each of the Ogio-sponsored players is currently under contract to play golf clubs or balls from manufacturers other than Callaway.
There was no indication what would happen to Callaway’s current lineup of golf bags in light of the Ogio acquisition, although Brewer is scheduled to address the matter in a call with investors on Thursday.
The acquisition was the second by Callaway in the last five months. It purchased custom boutique putter maker Toulon Design in August. Terms of that deal were not disclosed, although it did include bringing in industry veteran Sean Toulon to run its Odyssey putter business.
Callaway Golf’s stock price (ELY) was slightly up in after-hours trading.