Callaway Golf Acquires Toulon Design

Callaway Golf has acquired start-up putter company Toulon Design.

When the alert came through I checked my calendar. April 1st was months ago.

This isn’t a headline we wrote.

This really happened.

Specific terms were not disclosed, but on paper, it’s an odd deal. Smart acquisitions are usually about intellectual property. Dubious ones often boil down to market share. As an 11-month-old infant of a company, Toulon Design doesn’t have much in the way of either.

This one appears to be more about the intangibles.

And by intangibles, I mean Sean Toulon.

Toulon, who will slide into the role of SVP for Callaway Golf and General Manager of the Odyssey Brand, previously served as Executive Vice President for TaylorMade-adidas Golf before starting his own company.

Alongside the other former TaylorMade guy (Callaway’s Harry Arnett), and others, Toulon played a major role in the explosive growth that made TaylorMade the dominant force in the golf equipment industry. Now he’s joining the company whose emergence has hastened the former’s demise.

Short version – very few know and understand the golf equipment business like Sean Toulon. He’s a huge get.

By bringing in not just a proven putter guy, but a proven golf equipment guy, Callaway must certainly see an opportunity to strengthen its position in the putter category, where it is in a perpetual back and forth with Scotty Cameron for the #1 spot in consumer sales. It’s a classic step on the gas pedal move by an industry leader looking to add separation.

For Toulon, the alliance has the potential to provide the resources to grow the emerging putter business that bears his name and employs his two sons.

On paper, it’s a win-win.

Can it Work?

The two brands, one roof model hasn’t worked particularly well within the golf industry of late, but that probably won’t stop Callaway from trying. This latest go ‘round could manifest itself as something along the lines of Toulon Design by Odyssey.

Odyssey does what it does while occupying the space it always has, leaving the premium milled and custom space to the Toulon brand.

There’s enough separation there where, with the right execution, it could actually work.

Could. We’ll have to see how this plays out.

Twisting the Knife

While the acquisition looks to be straight-up good business, it also sends not-so-subtle two-word message to Callaway’s #1 rival, TaylorMade.

I suspect the move is being felt with the force of a gut punch inside the walls of TaylorMade.

It’s the kind of poetic vengeance that’s inevitable with the rise and fall of companies and the expiration of non-compete clauses. That doesn’t make it any less brutal.

A few weeks ago I checked in with Sean Toulon to see how things were going. He offered little of anything concrete, saying only that cool stuff was in the works.

I guess this qualifies.