Topgolf Callaway Brands Corp. (NYSE:MODG) announced late on Wednesday that its board approved a plan to split the company into two independent entities.

Callaway will be a golf equipment business with a highly complementary active lifestyle business, while Topgolf will trade as a high-growth, pure-play venue-based golf entertainment business.

The company plans a spin-off of the Topgolf business to Topgolf Callaway Brands’ (MODG) shareholders in a transaction that is intended to be tax-free to both the company and its shareholders for U.S. federal income tax purposes.

“While the Company expects that a spin-off of Topgolf into a stand-alone public company is the most likely separation path, the Company will continue to evaluate other options for separation to maximize shareholder value.”

Topgolf Callaway (MODG) CEO Chip Brewer noted that since the merger with Topgolf, the company has made considerable investments in the Topgolf business that have dramatically expanded its scale, digital capabilities, and venue profitability. Brewer said Topgolf is a high-quality, free cash flow generating business with a significant future value creation opportunity. MODG believes that creating two companies will result in material benefits to the stand-alone businesses that will maximize shareholder value, including enhanced strategic focus, optimized capital allocation, simplified operating structure, and distinct investment thesis for each entity.

Shares of Topgolf Callaway (MODG) soared 11.8% in postmarket trading following the announcement.