By Sam Boughedda
Investing.com -- Dave & Buster’s Entertainment (NASDAQ:PLAY) shares tumbled 10% after it announced the acquisition of Main Event from Ardent Leisure Group and RedBird Capital Partners on Wednesday.
The restaurant and arcade business said it paid $835 million in an all-cash transaction that is expected to close later this year. The purchase price represents a valuation of approximately 9x the earnings before taxes, interest, depreciation and amortization of Main Event.
In addition, the deal will also see the current CEO of Main Event, Chris Morris, be named CEO of Dave & Busters following Brian Jenkins retirement.
"We are thrilled to welcome Main Event to the Dave & Buster's family," said Kevin Sheehan, board chair and interim CEO. "This is a transformational combination for both brands."
Once the deal is closed, the companies expect $20 million in cost savings from store support and supply chain efficiencies during the first two years.