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Dave & Buster’s to acquire Main Event for $835M

Main Event CEO Chris Morris will head the combined eatertainment group, which will have nearly 200 North American locations.
Main Event
Photo courtesy Main Event

Dave & Buster’s announced Wednesday it intends to purchase food-and-games chain Main Event for $835 million.

When the deal closes later this year, Main Event CEO Chris Morris will helm the combined company. Dave & Buster’s had been without a permanent CEO since Brian Jenkins announced his retirement in September. Board Chairman Kevin Sheehan has served as interim CEO.

“We are thrilled to welcome Main Event to the Dave & Buster’s family,” Sheehan said in a statement. “This is a transformational combination for both brands.”

Coppell, Texas-based Dave & Buster’s has 145 locations in North America, while Dallas-based Main Event has 50 food-and-games units in 17 states. Main Event is currently owned by Australia-based Ardent Leisure Group Limited and RedBird Capital Partners.

With a focus on food, drinks and gaming, the two concepts may seem similar. But Sheehan said they target different demographics. Main Event’s audience is primarily families with young children while Dave & Buster’s focuses on young adults, he said.

“While each brand will continue to operate independently, ownership of both brands enables us to expand the breadth of customers we serve together, while also enabling each brand to better differentiate its offering to its core consumer,” Sheehan said.

Upon closing the deal, Dave & Buster’s said it expects to realize about $20 million in cost savings from the brands during the first two years from store support center consolidation and supply-chain efficiencies.

The purchase price represents a valuation multiple of roughly nine times Main Event’s 2021 adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization.

“As we have come to know Chris Morris, we have been very impressed by his execution capabilities and focus on profitable growth,” Sheehan said. “He has been particularly successful in improving and innovating the guest experience at Main Event and we expect that will carry over into his new role overseeing both brands.”

Unsurprisingly, the ups and downs of the pandemic have been especially difficult for food-and-games chains.

Late last month, Dave & Buster’s reported its fourth-quarter same-store sales had been up 7.6% until the omicron surge wiped out those gains and caused same-store sales to plummet 12.2% for the rest of the quarter.

But the chain’s first-quarter same-store sales started out down 8.8% and have climbed 13% in recent weeks.

In recent years, Dave & Buster’s has streamlined its menu, used technology to reduce labor needs and looked for entertainment to draw customers to its bars.

“Other than the omicron, this business is on fire,” Sheehan told investors at the time.

Main Event was founded in 1998. During the early months of the pandemic, it enlisted a focus group of moms to help develop safety protocols for re-opening and found ways to make its bowling, laser tag and other games more COVID-safe. By September 2020, the chain said its sales were 80% to 85% of pre-COVID levels.

“On behalf of the entire team at Main Event, we are excited to join the Dave & Buster’s family,” Morris said in a statement. “Together, we will be well-positioned to leverage our collective experience and provide our consumers with a category-defining entertainment experience.”

 

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