The Dallas-based chain increased 11% to $17.79 as of 11:37 a.m. in New York, equal to a market value of $696 million. According to a statement, the company sold 5.88 million shares at $16 in an effort to repay debt. They had been offered at $16-18.
Casual-dining at Dave & Busters Entertainment
Dave & Busters Entertainment Inc (NASDAQ:PLAY) is one of a number of similar companies that have tapped the markets this year. Both El Pollo LoCo Holdings Inc (NASDAQ:LOCO), a chicken restaurant, and Mediterranean-themed Zoe’s Kitchen Inc (NYSE:ZOES) completed IPOs this year, and their stocks have more than doubled in price since debuting.
Dave & Busters began in Little Rock, Arkansas, where David “Dave” Corriveau, ran an entertainment venue next door to James “Buster” Corley’s restaurant. According to the Dave & Busters’ website, the businessmen decided to combine their two ideas in one location, opening their first store in Dallas in 1982.
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The pair operated a public company from 1997 until 2006, when it was acquired by Wellspring Capital Management LLC and HBK Main Street Investors LP. Since 2006, the chief executive officer has been Stephen King, 56.
The Oak Hill Story
Oak Hill Capital Partners LP, the private-equity firm backed by Texas investor Robert M. Bass, purchased Dave & Busters Entertainment Inc (NASDAQ:PLAY) in 2010 for $570 million including debt. They had planned to file for an IPO in July 2011, but later withdrew the plan because of market conditions.
Oak Hill then attempted to sell the company for around $1 billion earlier this year, which attracted attention from Apollo Global Management LLC (NYSE:APO). Regulatory filings show that Oak Hill still owns 81% of Dave & Buster’s after the offering, which at the $16 offering price would give the firm a 145% unrealized gain on its investment.
Dave & Busters Entertainment Inc (NASDAQ:PLAY) records show that revenues were fairly evenly split between food and beverage sales, and the entertainment side of the business. In the year through February 2, the company posted $635.6 million in revenue, which represents a gain of 4.5% from the previous year.
Jefferies Group LLC and Piper Jaffray Cos. were responsible for managing the offering.