Wellspring registers Dave & Buster’s for $170m IPO

The arcade and dining franchise will use the fresh capital to pay down debt, roughly two years after Wellspring purchased the company in a $375m take-private. Wellspring will retain a controlling interest in the company.

Entertainment and dining franchise Dave & Buster’s will once again be publicly listed, just two years after it was taken private by middle market specialist Wellspring Capital Management.

The hybrid pub and arcade operator, which owns 49 restaurants throughout the US and Canada, will seek up to $170 million (€110 million) in fresh capital on the NASDAQ stock exchange, according to documents filed with the US Securities and Exchange Commission.  

Dallas-based Dave & Buster’s will use the offering’s net proceeds to repay roughly $75 million in debt, as well as related premiums, interest and expenses. The filings did not specify a date or a possible share price for the float.

Wellspring will retain a controlling interest in the company, although the exact equity amount the New York-based private equity firm will own was not detailed.

Wellspring currently controls 82 percent of Dave & Buster’s, while Dallas-based hedge fund manager HBK owns 18 percent. Wellspring could not be reached for comment.

The IPO registration, filed with the SEC on Friday, comes roughly two years after Wellspring completed its leveraged buyout of the restaurant chain for $325 million, paying some $18 per share to delist the company. Prior to that transaction, Bahrain-based investment firm Investcorp had expressed interest in a Dave & Buster’s deal, but ultimately walked away from the deal amid shareholder dissent.

Under Wellspring-installed chief executive Stephen King, Dave & Buster’s EBITDA grew 31.2 percent from 2005 to 2007. In the 12 month period ending in May, the franchise had record revenues of $543.3 million but reported a net loss of $3 million.

In May, Wellspring partnered with The Blackstone Group to complete the $1.4 billion take-private of Performance Food Group, a leading distributor of food products to hotels, schools, healthcare facilities and restaurants. Wellspring manages roughly $2 billion in capital.