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Dave & Buster’s IPO Terms Set, $16-$18 Per Share

dave and bustersTerms for Dave & Buster’s Entertainment (DAB:US), an Oak Hill backed operator of 70 dining establishments that feature large arcades, were announced today. As reported, $100 million will be raised by offering 5.88 million shares set at a public offering price between $16 and $18 each, which at midpoint would command market value of $711 million.

Founded in 1982, Dave & Buster’s Entertainment booked $690 million in predecessor sales for 12 months ending July 31, 2014. According to Dave & Buster’s, Inc., the parent company, in a filing with the Securities and Exchange Commission an application to trade on the Nasdaq Stock Market under the trading symbol PLAY has been approved. As part of this, maximum offering price of $121.76 was proposed.

Previously, Dave & Buster’s said IPO proceeds would be used to pay back term loan debt. For the current IPO offering, Piper Jaffray (PJC) and Jefferies LLC (JEF) are lead book runners and during the week of October 6, 2014, it is expected that the price will be set.

In 2006, the company went private by Wellspring Capital Management but was then sold in 2010 to Oak Hill for $570 million. At that time, revenue was split between amusement, which accounted for 51% of sales in 2013 and beverages, which had 15% of segments. Then in late 2012, market conditions forced a previous IPO plan to be called off.

For 26 weeks ending August 3, 2014, total successor revenues increased to $376 million, up 17%. The EBITDA also rose to $89 million, which was a 19% increase. Compared to its competition, store sales for Dave & Buster’s rose 5.2%, up from just 0.5% from the prior year during the same period. By quarter end, total debt was $438 after making adjustments using proceeds from the IPO to pay down debt.

As stated in the Wall Street Journal this past May, Dave & Buster’s received an offer from Roark Capital Group worth close to $1.1 billion. It was also reported there was a possible IPO launch that would take place sometime after Labor Day.

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