Dive Brief:

• Pinstripes, a 13-unit eatertainment chain, plans to go public through a business combination with Banyan Acquisition Corp., the companies said in a press release Friday.
• The transaction values the combined company on a pro forma enterprise value of about $520 million at $10 per share. It also includes an upfront equity investment in Pinstripes of over $20 million made by Middleton Partners.
• Going public could help Pinstripes speed up its growth in the U.S. and internationally, according to the press release. The closing of the transaction is conditioned on the receipt of about $75 million in gross cash proceeds by the combined company, which will be used to support Pinstripe’s expansion strategy. 

Dive Insight:

Pinstripes currently has six units under construction, with additional venues expected to open in 2024. The company is planning to reach 150 units in the future in the U.S. and expand into international markets. 

“We are at a strategic inflection point of substantial growth, and believe we are well-positioned to capitalize on the exciting experiential trends in the global marketplace,” Pinstripes CEO and founder Dale Schwartz said in the press release. “We are targeting sales and Adjusted EBITDA growth of more than 20% per year over the next several years.”

Pinstripes, which includes a bistro, bowling, bocce and private event spaces, generates average unit volumes of over $8 million. Pinstripes has venue-level EBITDA margins of over 17%, according to the press release, and expects its 2024 revenue to be between $185 million and $195 million with an adjusted EBITDA of $30 million to $33 million. Comparatively, public eatertainment chain Dave & Busters, which operates over 200 units across its Dave & Buster’s and Main Event brands, reported revenue of about $2 billion and EBITDA of over $480 million in 2022.

“Upon the founding of Banyan Acquisition Corp., we declared our aim to identify an appealing business with promising growth opportunities that would benefit from our expertise and experience in the foodservice industry,” Jerry Hyman, Banyan board chairman, said in the press release. “We sought a company with a strong market position, competitive advantages, and a highly experienced management team that has a proven track record of maximizing value.” 

As a private company, Pinstripes has partnered with real estate companies, who have also invested in the chain, as its strategy for growth. Pre-pandemic, the company raised $25 million in minority equity from the likes of Hudson’s Bay, Brookfield Properties and Simon Property Group. 

Going public through a special purpose acquisition is not rare for restaurant groups. BurgerFi did so in 2020. Panera Brands attempted to go public through Danny Meyer’s SPAC, but that deal ended in 2022 due to unfavorable market conditions. Panera is now planning to go public through a traditional initial public offering. As a public company, Pinstripes would join newly minted public company Cava and Gen Restaurant Group, which filed its S-1 paperwork earlier this year. Fogo de Chão is also rumored to be going public this year.

The transaction is expected to be completed during the fourth quarter, at which time Pinstripes’ common stocks would be listed on the New York Stock Exchange under “PNST.”