Pinstripes Inc., the restaurant chain that combines bowling and bocce with Italian fare, is going public in a merger with a blank-check company at a pro forma enterprise value of about $520 million.
The transaction with Banyan Acquisition Corp. includes an equity investment of more than $20 million from Middleton Partners, according to a statement Friday confirming an earlier Bloomberg News report.
Once the deal with the special purpose acquisition company, or SPAC, is completed, Pinstripes will trade on the New York Stock Exchange under the symbol PNST, the company said in the statement.
The deal not only follows the SPAC tidal wave that has receded in the past year, it comes as the long-frozen market for initial public offerings is just beginning to thaw, with listings such as Mediterranean restaurant chain Cava Group Inc. leading the way.
Banyan Chairman Jerry Hyman said the SPAC initially identified 900 potential merger targets and had “soft interest meetings” with 100 of them. It signed non-disclosure agreements with 20 of those before picking Pinstripes, he said.
“We felt that post pandemic, the food service industry was going to come back faster, and more robust than before,” Hyman said in an interview.
“Americans aren’t going to stop going out to eat,” he said. “Eating is a lot more than just filling your belly.”
Unlike many of the startups that have gone public either through SPAC mergers or IPOs, Pinstripes is profitable. For 2024, the company is projected to have adjusted earnings before interest, taxes, depreciation and amortization of $30 million to $33 million on revenue of $185 million to $195 million, according to the statement.
Pinstripes has 13 locations in eight US states and the District of Columbia, with six more under construction in Florida, California and New Jersey, according to its website.
It’s one of several chains in the so-called eatertainment category, restaurants that provide activities such as golf, ping pong and tetherball, among other games.
Read more: Your Fancy Duck Dinner Will Now Take Place at a Bowling Alley
“I grew up in Cleveland and bowled as a kid,” said Pinstripes Chief Executive Officer Dale Schwartz, who opened the company’s first location in 2007 in Northbrook, Illinois.
Schwartz, who will continue to lead the company, said negotiations with Banyan began in earnest three months ago. With the IPO market in the US in the gutter at that point, the timing favored a SPAC deal, he said.
“The IPO market if not closed, was certainly not as open as it was over the last couple years,” Schwartz said. “I don’t mind being a contrarian. If I wasn’t a contrarian, I wouldn’t have been in business.”
Schwartz’s career reflects his willingness to change course. He founded an asphalt sealcoating company and later led a biotechnology company, worked as an analyst in Morgan Stanley’s mergers and acquisitions department and later became a principal at Odyssey Partners, the Pinstripes website shows.
Banyan, led by CEO Keith Jaffee, raised almost $242 million including so-called greenshoe shares in January 2022. With redemptions and following a shareholder vote in April to extend its deadline to complete a merger, the SPAC, also based in Northbrook, has a market value of about $117 million.
(Updates with statement in second paragraph)
