In a recent move that has sent shockwaves across the golfing community, Callaway has announced that it’s parting ways with Topgolf, its coveted entertainment section, in a deal valued at roughly $1.1 billion. After nearly two decades of partnership, the brand announced the decision on Tuesday. It was noted that Callaway had sold 60 percent of its Topgolf unit to a Los Angeles private-equity firm, Leonard Green.

“As we considered various alternatives to separate Topgolf, including a potential spin-off transaction, we received interest from several parties,” said Callaway CEO and president Chip Brewer. “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. This transaction is highly attractive in that it provides the company with both significant proceeds and substantial upside in the continued growth of Topgolf.”

Leonard Green was already a minor investor in Topgolf and has over “$75 billion in assets and typically targets service-oriented businesses across consumer, health care, and other sectors.” As part of the deal, Toptracer, which is commonly seen at all Topgolf facilities for tracking ball-flight analytics, will also be transferred to Leonard Green. Callaway had invested in Topgolf in 2006, recognizing its potential to grow the game and make it accessible to everyone.

Initially, Callaway controlled 14% of the business before the two merged in October 2020, and Callaway then acquired the remainder of Topgolf in 2021 at a valuation of $2 billion, according to Business Report. However, over the years, Topgolf’s stock prices began to drop (roughly 65%), which led to Callaway making the decision last year to split the combined entity back into separate, independent companies. Initially, it was just talk, circulating with no substantial information on whether it was converted into action. But Brewer’s announcement confirmed the split.

With this deal, Callaway is expected to pocket around $770 million in net proceeds, with the transaction set to close in the first quarter of next year, according to Chip Brewer. But this isn’t Callaway’s first major change in the portfolio this year.

Callaway’s Topgolf deal is the second major change this year

The Callaway-Topgolf split is hardly Callaway’s first strategic shake-up this year. Earlier this year, in April, the equipment giant sold its Jack Wolfskin brand to Anta, a Chinese multinational sportswear company, for a reported $290 million. Jack Wolfskin, a German brand known for its outdoor apparel and camping accessories, was bought by Callaway in 2019 for $476 million.

“I am pleased to announce we have reached an agreement to sell the Jack Wolfskin business to ANTA Sports, a global leader in sports apparel and footwear,” said Chip Brewer. ” We believe ANTA Sports will be a good steward of the iconic Jack Wolfskin brand, and we thank our Jack Wolfskin employees who have worked diligently to right-size this business and prepare it for this next chapter.”

As per a press release by Callaway, the loss estimated from the Wolfskin business was reported to be around 18 million Euros in the first half of the year, and is expected to increase to 30 million by the end of this year.

Through the sale of the apparel brand and majority of its Topgolf stake, Callaway is streamlining its focus, doubling down on what it does best — golf equipment and apparel. As Brewer put it, these deals “will allow us to increase our focus and optimize our resources on our core business.”

With all the proceeds, the company will reinvest into its equipment and apparel business, and also pay its debt and capital to shareholders through stock repurchases. Callaway will now be renamed “Callaway Golf Company” and will predominantly focus on making golf equipment in the future.

It is the No.1 equipment choice for most golfers in the U.S. and the second most opted for ball brand after Titleist. Odyssey putters, Ogio accessories, and Travis Mathew apparel remain part of its growing arsenal.