Dave & Buster’s Announces a $100 Million Share Repurchase – Buyback Wednesdays

If you feel that arcades are just for kids, you’ve probably never been to Dave & Buster’s (PLAY). The Texas-based owner-operator of venues combines entertainment and dining for adults and families with 200 locations in 41 states, Canada, and Puerto Rico. This unique chain is part sports bar, part restaurant, and part arcade. I was pleasantly surprised by my experience at one of their locations a few years ago and was invested in the company pre-pandemic.

Source: daveandbusters.com

D&B opened its first entertainment and dining center in 1982 and initially went public in 1995. It was then purchased by private equity shop Wellspring Capital Management in 2006, sold to PE firm Oak Hill Capital in 2012, and taken public again in 2014. Its stock currently trades for just under $35 per share, well below its all-time high of $73.48. The current market cap is $1.74 billion and enterprise value is $4.4 billion on account of $1.05 billion in net debt and $1.63 billion in capital leases on the balance sheet.

D&B does not own its real estate and has material lease obligations. In total, the company has annual fixed lease obligations of $192 million per year.

On March 28, 2023, Dave & Buster’s Entertainment, Inc. (PLAY) announced a $100 million buyback, representing around 5.7% of its market cap at announcement.

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