Dallas-based Topgolf International Inc., an operator of driving ranges with a party atmosphere, is in talks to go public through a merger with the blank-check company Churchill Capital Corp. II, according to people with knowledge of the matter.
Topgolf is in talks to merge with the special purpose acquisition company, or SPAC, led by former Citigroup banker Michael Klein, said the people, who asked not to be identified because the talks are private. Churchill is seeking to raise additional equity as part of the deal and has begun conversations with potential investors, one of the people said.
As with any deal that hasn’t been finalized, it’s possible talks could collapse.
“As a private company, we do not comment on market speculations,” Topgolf said Friday in an emailed statement. “Our focus remains on growing the Topgolf Entertainment Group business and continuing to reopen our venues safely and responsibly.”
A representative for Churchill didn’t immediately respond to a request for comment.
Topgolf had selected banks for an initial public offering that could have come as soon as this year, Bloomberg reported in January. The company could have been valued in an IPO at about $4 billion, people familiar with the matter said then.
Since the onset of the coronavirus pandemic, merging with a SPAC has become an increasingly popular way for closely held companies to go public in a period of market tumult and volatility.
Led by Chief Executive Officer Dolf Berle, Topgolf has $525 million in outstanding debt, according to data compiled by Bloomberg.
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The company’s driving ranges, some of which are reopening after months of being shuttered to combat the spread of the Covid-19 pandemic, have bays that can accommodate up to six players who can track their balls electronically while ordering food and drinks. Some venues feature rooftop bars, restaurants, shops, pools and concert halls.
The company also has locations in the U.S., the U.K. and Australia, with others opening soon in Canada, Mexico and the United Arab Emirates, according to its website.
Private equity firm Providence Equity Partners made a “sizable minority investment” in Topgolf in 2016, according to a statement at the time. The company’s backers also have included Callaway Golf Co., which acquired a minority stake with other investors in a deal completed in 2017.
Churchill Capital Corp. II went public last year, raising $690 million including the so-called greenshoe shares.
Another of Klein’s SPACs, Churchill Capital III Corp. on Sunday agreed to merge with health-care services provider MultiPlan Inc. in an $11 billion deal, including debt.
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