Dave & Buster's Inc. is changing hands, with Wellspring Capital Management agreeing to sell the chain of restaurants that double as videogame arcades to Oak Hill Capital Partners in a $570 million deal.
Wellspring took Dave & Buster's private in 2006 for about $257 million in cash plus debt. It replaced the company's founders with new management, expanded the chain and last year filed to take it public again. But the public markets have been unreceptive to restaurant stocks, leading to the sale to Oak Hill instead of an IPO.
The transaction, which is expected to be announced Monday, is the latest in a barrage of deals in which private-equity firms are selling their companies to one another. These so-called secondary leveraged buyouts hold great appeal for the private-equity ecosystem. Sellers can book profits and return cash to investors, while buyers can put money to work. Meanwhile, investment bankers earn millions of dollars of fees advising and lending on these transactions.
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