Fade to black. . . again:
Dave & Buster’s Calls Off Its I.P.O.
By MICHAEL J. DE LA MERCED
DealBook
New York Times
October 4, 2012, 6:28 pm
It’s game over for Dave & Buster’s Entertainment’s stock listing.
The restaurant-and-arcade chain announced on Thursday that it was withdrawing its planned initial stock sale, citing “continued volatility” in the markets.
The chain’s withdrawal is the latest disappointment for the world of initial public offerings in a week that has been full of them. Many of the offerings that priced this week have performed poorly once the shares began trading. (One exception may be the Fleetmatics Group, a software-as-a-service company that priced its offering on Thursday at $17, the top of its price range.)
Dave & Buster’s offering had already been regarded with some skepticism in the market. The company has reported annual losses for three of its four last fiscal years, including posting a $7 million loss for the 12 months that ended Jan 29.
The choppiness of the initial offering market appeared to seal the stock sale’s fate.
“While we received significant interest from potential investors, current market conditions are not optimal for an I.P.O. at this time,” Steve King, Dave & Buster’s chief executive, said in a statement.
The company had expected to price its offering at $12 to $14 a share, raising $100 million at the midpoint of the range. It would have traded under the ticker symbol “PLAY” on the Nasdaq stock market.
Dave & Buster’s pulled offering means that its owner, Oak Hill Capital Partners, will have to hold on to the company longer. The private equity firm had planned to sell some of its position, leaving it with a roughly 68 percent stake, while the company’s management team would have owned 3 percent.
Oak Hill purchased the company from another buyout firm, Wellspring Capital Management, two years ago for $570 million.
The canceled I.P.O. caps a rough week for companies seeking to go public. Shares of many firms tumbled after their debuts. The Berry Plastics Group, for instance, priced its offering at $16, the bottom of its expected range, and its stock dropped 5 percent in its first day of trading on Thursday.
“This week has been nothing short of a disastrous week for I.P.O.’s,” said Scott Sweet, the senior managing director of IPOboutique.com.
So severe has the damage been, Mr. Sweet said, that he fears what will happen next week, when 10 companies are set to price their offerings. They include Shutterstock, a stock art provider, and Workday, a human resources software maker.
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