Dave & Buster’s Entertainment Inc. filed Monday for an initial public offering in its third attempt in six years to return to the public market.
In filings with the Securities and Exchange Commission, the Dallas-based casual-dining-and entertainment operator said it has applied for a listing on the Nasdaq Stock Market LLC under the ticker symbol “PLAY.” The number of shares of common stock to be offered and the price have not yet been determined, but the filing indicated the offering could raise up to $100 million.
The 69-unit chain is owned by private-equity firm Oak Hill Capital Partners, which acquired Dave & Buster’s in 2010 in a deal estimated at $570 million.
Dave & Buster’s planned an IPO in 2011, but pulled back the following year, citing “continued volatility for new issuers in the equity market.” That year, CKE Restaurants Inc., parent to the Carl’s Jr. and Hardee’s quick-service chains, also planned an IPO that was later cancelled due to market conditions.
An IPO was also filed but never completed in 2008 under the name Dave & Buster’s Holdings Inc., when it was owned by affiliates of private-equity firm Wellspring Capital Partners III L.P.
Dave & Buster’s was operated as a public company from 1997 to early 2006, when it was taken private by Wellspring, along with HBK Main Street Investors L.P., who later sold the chain to Oak Hill Capital Partners.
Founded in Dallas in 1982, Dave & Buster’s is known as a casual-dining brand with an “Eat, Drink, Play and Watch” proposition, where guests can grab a burger and a beer, play interactive games in the Midway, or watch sports and other events on high-definition TVs.
Slightly more than half of the chain’s revenue comes from the amusement side of the business. Average revenue per restaurant in 2013 was about $10.1 million.
In 2011, the company began an initiative to enhance its sports bar, adding a D&B Sports format with designated seating and décor highlighting local sports teams. About 87 percent of units offer D&B Sports.
Company officials say the brand has room to grow, projecting that Dave & Buster’s could surpass 200 locations in the U.S. and Canada. The company is exploring a move outside North America, with the goal of opening its first restaurant outside the U.S. and Canada in 2016.
In fiscal 2014, Dave & Buster’s expects to open seven to eight units, including four locations already open.
Locations range in size from larger formats between 30,000 and 45,000 square feet, to smaller units between 25,000 and 30,000 square feet.
Earlier this year, Dave & Buster’s refinanced its debt with a new senior secured credit facility that provided $530 million and a $50 million revolving credit facility. Proceeds from the IPO will go toward repaying outstanding debt.
Dave & Buster’s ended fiscal 2013 with net income of $2.2 million on revenue of $635.6 million, with same-store sales rising 1 percent for the year.
In fiscal 2012, the company reported net income of $8.8 million and revenue of $608.1 million. Same-store sales rose 3 percent. Fiscal 2011 resulted in a net loss of $7 million, with revenue of $541.5 million and same-store sales rising 2.2 percent.
For the 26 weeks ended Aug. 3, the company reported a net loss of $2.4 million, with revenue of $376.2 million and same-store sales rising 5.2 percent.
Earlier this year, rumors circulated that investment firm Apollo Global Management LLC, which acquired Chuck E. Cheese’s in February, was considering a bid for Dave & Buster’s.
The Wall Street Journal reported in May that Roark Capital Group had made an offer worth nearly $1.1 billion.
Jefferies LLC, Piper Jaffray & Co., William Blair & Company LLC, Raymond James & Associates and Stifel are acting as book runners for the proposed offering. LOYAL3 Securities Inc. is acting as co-manager.
Dave & Buster’s joins a number of restaurant chains that have held IPOs this year, including El Pollo Loco Holdings Inc., Papa Murphy’s Holdings Inc. and Zoe’s Kitchen Inc.
Restaurant chains rumored to be planning IPOs this year include Shake Shack; Habit Restaurants LLC, parent to Habit Burger Grill; and Café Rio Inc.
Contact Lisa Jennings at [email protected].
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