Not Too Soon For a Dave & Buster’s IPO

Is it too soon for Dave & Buster’s to go public?

Not at all. A little over a year ago, Oak Hill Capital Partners completed its $570 million buy of Dave & Buster’s, an interactive entertainment and restaurant chain, from Wellspring Capital Management. Oak Hill invested $240 million equity in the deal, sources have previously told peHUB.

Dave & Buster’s–which operates “high volume entertainment/dining complexes”–filed for an IPO that could raise as much as $150 million, according to a July 15 regulatory filing. The company didn’t disclose how many shares they would sell, their price range or on what exchange they would list. That information will come in future filings. However, Dave & Buster’s does plan to trade under the ticker “PLAY,” according to the filing.

Goldman Sachs, Jefferies and Piper Jaffray are co-bookrunners for the IPO.

Founded in 1982, Dallas-based Dave & Buster’s is known for more than just its food and has arcade games, such as “Dance Dance Revolution” and “Spin-n-Win.” The company has 56 venues spread through 24 states and Canada.

‘It’s only too soon [for an IPO] if their numbers are not good,” one PE exec says.

The recent quarterly numbers are good. Dave & Buster’s fiscal first quarter profit increased 33% to $5.2 million for the 13 weeks ended May 1. Revenue grew 4.9% to $148.6 million. Adjusted EBITDA jumped by 24.4% to $33.6 million. Long-term debt, as of May 1, stood at $345.7 million.

“The company has done pretty well since they bought it and the IPO market is starved for ‘growth concepts,'” one banker says. “It’s going to be a pretty good outcome for Oak Hill.”

Oak Hill owns just about all, or about 96%, of Dave & Buster’s. In February, Dave & Buster’s paid out a $100 million dividend to its sponsor Oak Hill. With the dividend, Oak Hill had made back 40% of its investment, sources told peHUB at the time. Oak Hill did not disclose if it was selling shares in the IPO but said it would continue to hold a majority after the offering. PE firms typically don’t sell much of their holdings in IPOs but wait for secondaries to offload stakes.