Callaway
Golf Company
Carlsbad, California
Do you know
that California is the home of world’s largest manufacturer
of Golf clubs? Callaway Golf Company, the world's largest manufacturer
of premium golf clubs, is headquartered in Carlsbad, California.
Besides designing, manufacturing and servicing its products in-house,
Callaway Golf distributes them in more than 70 countries across
the world.
A lifelong golf aficionado,
Ely Callaway, former President of Burlington Industries founded
the company in 1982 at the age of 63. Investing $400,000 from
his own savings, he acquired a small California-based company
manufacturing golf clubs with the belief that he could revolutionize
the golf club industry with his innovative ideas. Speaking to
a group of entrepreneurs in 1994, Callaway pointed out that, "People
had been making golf clubs for 300 years," and wondered,
that, “The major manufacturers of golf clubs weren't willing
to take a risk on a radically new design." A golf fanatic
from the age of ten, Callaway was an expert in the tools of the
sport and was well aware of the market trends. He remarked, "I
had purchased and used every kind of golf club there was, and
I knew the competition."
Two small business
investment companies (SBICs): MVenture Corp (now Banc One Capital
Partners) and National City Capital Corporation believed in Callaway’s
ideas and invested in his company. Wayne Gaylord, the administrative
officer at Banc One Capital Partners who managed the Callaway
investment recollected: "Our CEO at that time, John Farmer,
was an avid golfer and really pushed this proposal. It was an
unusual type of investment, and John was practically laughed out
of the investment committee at first. I believe John had the last
laugh though, as this proved to be one of the most profitable
investments in Banc One Capital Partners' twenty year history."
Through the years of
1985-1987, MVenture Corp/Banc One Capital Partners put in an investment
of $510,000 in Callaway Golf by way of funds to use as working
capital and to purchase new equipment. Their investments of $64,000
in 1989 and $134,000 in 1990 made their total investment $708,000.
Two instances of financing by another SBIC, National City Capital
Corporation, $200,000 in March 1985 and $100,100 in November 1986
further boosted the company’s finances. Callaway went public
in 1992, both the SBICs sold their holdings in the company.
The dream of Ely Callaway,
with the early support of small business investment companies,
has had a major impact on the world of golf. Callaway's Great
Big Bertha® Titanium Driver was the #1 driver in use on each
of the five major golf tours, in 1997. The fact that professional
golfers using Callaway's drivers and irons had more wins than
any of the competitors speaks volumes for the success of the company’s
products. Jack Nicklaus not only played with a Big Bertha®
3-wood at the 1997 PGA Championship but also visited the Callaway
plant in Carlsbad, California later. In an August 1997 report
in Golf World magazine, he asserted that the Callaway trip was
an eye opener. He stated, "It was quite obvious to me that
their technology is so far advanced to anybody, that there's no
way to compete with them.”
Besides the golfers
and investors, the Callaway story has made many other success
stories possible. Creating thousands of jobs, providing millions
of dollars in federal and state income tax revenues, and contributing
significantly to U.S. export sales are some of the positive offshoots
of the Callaway success story. What started as a company with
just four employees at the time of the SBICs’ first investment,
Callaway Golf has over 2,400 employees, besides providing indirect
employment to more than 11,000 people at suppliers' companies.
What other fact can speak more about the success story?
For further
reading:
http://www.nasbic.org/success/stories/callaway.cfm
http://www.public.iastate.edu/~chrisz/Academic%20Projects/acct592/592f.pdf
http://www.sba.gov/INV/callaway.html |
