Pinstripes to list on NYSE via SPAC in Q4

Pinstripes, a chain of upscale entertainment centers combining bowling and bocce with fine dining and private events, plans to go public via a merger with SPAC Banyan Acquisition Corp. in a deal valued at $520 million.

Why it matters: It's yet another sign of life in what has been a moribund IPO market.

Of note: The deal was well underway before the timing of Cava's IPO was firmed up, Pinstripes CEO Dale Schwartz tells Axios.

Details: The transaction is expected to close in Q4 when Pinstripes stock and warrants will be listed on the NYSE under the ticker symbols PNST and PNST WS, respectively.

• The combined company is valued at a pro forma EV of about $520 million, at $10 per share.
• It also includes $20 million in cash upfront from Middleton Partners, an affiliate of Banyan.
• In addition, the closing is conditioned upon the delivery of $75 million in cash proceeds, which will be invested in its growth strategy, namely the opening of more locations.

Zoom in: Six months ago, discussions began with several SPACs while a traditional IPO was also being considered, Schwartz says.

• Three months ago, negotiations with Banyan began, which was chosen due to the experience of its chairman, Jerry Hyman, and CEO Keith Jaffee, the cash injection from Middleton, and the alignment on valuation and strategy, he explains.
• Schwartz says he is comfortable proceeding with the deal no matter what happens to the economy or the public markets.

Between the lines: As Pinstripes weighed its options, there was a question over whether the IPO market was open, so the company chose a SPAC, Schwartz says.

• And it was important for the company to gain access to public market capital this year to fund its growth initiatives, he adds.

Flashback: Over the last four years, Pinstripes received growth equity in exchange for a minority stake from real estate companies Simon, Brookfield, Westfield, Macerich, Hudson Bay and O’Connor and LaSalle.

By the numbers: "2024 net revenue is estimated to grow to approximately $185 million — $195 million, resulting in projected adjusted EBITDA of approximately $30 million — $33 million," per the announcement.

• "We are targeting sales and adjusted EBITDA growth of more than 20% per year over the next several years as we further expand our business and execute our plan," Schwartz said in a statement.

What's next: Currently, Pinstripes has 13 venues open in eight states and Washington, D.C., but it aims to open six more by early 2024.

• The company estimates it could have up to 150 locations in the U.S.
• It also sees an opportunity to expand overseas.