US-based restaurant and entertainment chain Dave & Buster’s Entertainment is in discussions with private equity firms to potentially offload a stake in the business, people close to the situation told Reuters.
According to the sources, the company is currently exploring a possible private investment in public equity (PIPE) investment, which could lead to a buyout group owning a significant holding in the eatery.
The discussions come amid the growing coronavirus pandemic, which has forced Dave & Buster’s to shut down its venues and left the chain scrambling for financing options.
Yesterday, in its fourth quarter earnings statement, the business said it was also in negotiations with its lenders and outside debt and equity providers.
It noted the talks could help amend its credit facility, reduce its lease and enhance its liquidity, without providing any further details.
Dave & Buster’s was not immediately available to comment when approached by Reuters.
Headquartered in Dallas, the group operates 137 venues across the US and Canada, all of which are equipped with a full-service restaurant and arcade.
As of 20th March 2020, all its stores were temporarily closed due to the ongoing COVID-19 pandemic, which has continued to spread throughout the US and other countries worldwide.
Dave & Buster’s has put several measures in place to help keep the business afloat during the crisis, including reducing 90.0 per cent of its store management and corporate staff, as well as furloughing over 15,000 of its hourly team employees.
The company has also halted all planned store openings and remodelling and is in talks with landlords and vendors to try and lessen its expenses.
During the financial year ended 2nd February 2020, Dave & Buster’s posted revenue of USD 1.35 billion, compared to USD 1.26 billion in the preceding 12 months.
Reuters noted that several companies have been resorting to PIPE investments to boost their finances during the pandemic, including US-based payment firm EVO Payments and online real estate broker Redfin.
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