Leonard Green Partners has agreed to acquire 60% of Topgolf in a transaction valuing the business at $1.1bn, according to a report by the Financial Times. The private equity firm already held a 3% stake in Topgolf Callaway Brands.

The deal will generate $770m in net proceeds for Topgolf Callaway, which plans to use the capital to cut debt and repurchase shares. The agreement also covers the Toptracer tracking technology unit.

Callaway acquired Topgolf in 2020 through a $2bn all-stock deal completed during the pandemic. However, rising rates, higher construction costs, and growing competition placed pressure on the venue-led model. Topgolf’s like-for-like sales have dropped about 10% each quarter in recent years.

Topgolf Callaway’s market value has fallen to about $2bn, despite solid results in its core equipment division. Meanwhile, rival Acushnet has seen its share price double over five years.

“After a robust process and a thorough evaluation of a range of alternatives, we believe this sale is the best outcome for our shareholders, as well as our employees and other stakeholders,” said chief executive Chip Brewer. He noted the value of the cash proceeds and the company’s ongoing minority stake.

Leonard Green manages $75bn and has invested in consumer brands including Shake Shack and Petco. Its new investment extends a long period of private equity interest in Topgolf, which previously secured backing from WestRiver Group and Providence Equity.

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