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Dave & Buster's (PLAY) to Acquire Main Event for $835 Million
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Dave & Buster's Entertainment, Inc. (PLAY - Free Report) recently reached an agreement to acquire Main Event from Ardent Leisure Group Limited and RedBird Capital Partners. The deal is valued at $835 million.
The transaction, which is likely to be completed later this year, is subject to customary closing conditions that include approval by Ardent Leisure stockholders as well as regulatory review. Following the closing of the transaction, the present CEO of Main Event will be the CEO of Dave & Buster's.
The company anticipates achieving synergies of nearly $20 million within the first two years, backed by store support center alliance and supply-chain competency. It expects the acquisition to be accretive both from an earnings and growth perspective. Dave & Buster's is likely to benefit from this buyout as Main Event operates 50 centers in 17 states across the country.
Kevin Sheehan, board chair and interim CEO said, "This is a transformational combination for both brands. From a strategic fit perspective, Main Event's business model, footprint and asset quality aligns well with Dave & Buster's. Main Event targets a different demographic, families with younger children, while Dave & Buster's has primarily targeted young adults."
Image Source: Zacks Investment Research
Price Performance
Shares of Dave & Buster's have gained 11.4% in the past six months, against the industry's decline of 13%. The company has been benefiting from a higher mix of amusements and a leaner operating model. Going forward, it expects the momentum to continue on the back of its strategic initiatives that include a new menu, optimized marketing and technology investments.
Dave & Buster's continues to pursue a disciplined new store growth strategy in both new and existing markets, given the broad appeal of its brand. Management believes that it can grow the concept to more than 200 units in North America over time. In addition to growth potential that exists in North America, management is optimistic regarding the brand's significant appeal in certain international markets.
Some other top-ranked stocks in the Zacks Retail-Wholesale sector include BBQ Holdings, Inc. , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Tapestry, Inc. (TPR - Free Report) .
BBQ Holdings sports a Zacks Rank #1. BBQ has a long-term earnings growth of 14%. Shares of the company have surged 30.4% in the past year.
The Zacks Consensus Estimate for BBQ Holdings' 2022 sales and EPS suggests growth of 40.9% and 66.2%, respectively, from the year-ago period's levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 31.3%. Shares of the company have appreciated 57% in the past year.
The Zacks Consensus Estimate for Arcos Dorados' 2022 sales and EPS suggests growth of 10.3% and 62.5%, respectively, from the year-ago period's levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have declined 21.1% in the past year.
The Zacks Consensus Estimate for Tapestry's 2022 sales and EPS suggests growth of 17.5% and 22.9%, respectively, from the year-ago period's levels.
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Dave & Buster's (PLAY) to Acquire Main Event for $835 Million
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) recently reached an agreement to acquire Main Event from Ardent Leisure Group Limited and RedBird Capital Partners. The deal is valued at $835 million.
The transaction, which is likely to be completed later this year, is subject to customary closing conditions that include approval by Ardent Leisure stockholders as well as regulatory review. Following the closing of the transaction, the present CEO of Main Event will be the CEO of Dave & Buster's.
The company anticipates achieving synergies of nearly $20 million within the first two years, backed by store support center alliance and supply-chain competency. It expects the acquisition to be accretive both from an earnings and growth perspective. Dave & Buster's is likely to benefit from this buyout as Main Event operates 50 centers in 17 states across the country.
Kevin Sheehan, board chair and interim CEO said, "This is a transformational combination for both brands. From a strategic fit perspective, Main Event's business model, footprint and asset quality aligns well with Dave & Buster's. Main Event targets a different demographic, families with younger children, while Dave & Buster's has primarily targeted young adults."
Image Source: Zacks Investment Research
Price Performance
Shares of Dave & Buster's have gained 11.4% in the past six months, against the industry's decline of 13%. The company has been benefiting from a higher mix of amusements and a leaner operating model. Going forward, it expects the momentum to continue on the back of its strategic initiatives that include a new menu, optimized marketing and technology investments.
Dave & Buster's continues to pursue a disciplined new store growth strategy in both new and existing markets, given the broad appeal of its brand. Management believes that it can grow the concept to more than 200 units in North America over time. In addition to growth potential that exists in North America, management is optimistic regarding the brand's significant appeal in certain international markets.
Dave & Buster's sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Other Key Picks
Some other top-ranked stocks in the Zacks Retail-Wholesale sector include BBQ Holdings, Inc. , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Tapestry, Inc. (TPR - Free Report) .
BBQ Holdings sports a Zacks Rank #1. BBQ has a long-term earnings growth of 14%. Shares of the company have surged 30.4% in the past year.
The Zacks Consensus Estimate for BBQ Holdings' 2022 sales and EPS suggests growth of 40.9% and 66.2%, respectively, from the year-ago period's levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 31.3%. Shares of the company have appreciated 57% in the past year.
The Zacks Consensus Estimate for Arcos Dorados' 2022 sales and EPS suggests growth of 10.3% and 62.5%, respectively, from the year-ago period's levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have declined 21.1% in the past year.
The Zacks Consensus Estimate for Tapestry's 2022 sales and EPS suggests growth of 17.5% and 22.9%, respectively, from the year-ago period's levels.