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RICHMOND - Lucky Strike Entertainment (NYSE:LUCK), a $1.4 billion market cap entertainment company with annual revenues of $1.18 billion, has acquired the real estate underlying 58 of its entertainment venues for $306 million, the company announced in a press release Thursday.
The transaction converts Lucky Strike from tenant to owner at these locations, which the company already operates. The properties generated approximately $80 million in annualized EBITDAR against $21 million in rent obligations that were previously subject to 15% escalations every five years. According to InvestingPro data, the company’s total EBITDA stands at $292.55 million for the last twelve months.
The acquisition spans 16 states including California, Illinois, Georgia, Arizona, and Colorado.
"By acquiring the real estate underlying these 58 existing locations, we maximize our flexibility to optimize our capital structure and location footprint," said Bobby Lavan, Chief Financial Officer of Lucky Strike Entertainment.
The company financed the purchase through a $230 million bridge facility, its revolving credit line, and cash on hand. With total debt of $3.04 billion and a current ratio of 0.64, InvestingPro analysis indicates the company operates with a significant debt burden. According to the statement, the transaction is expected to be immediately accretive to earnings and cash flow.
Lucky Strike Entertainment operates over 360 location-based entertainment venues across North America, offering bowling, amusements, water parks, and family entertainment centers. The company also owns the Professional Bowlers Association.
The acquisition represents a strategic shift for the entertainment company as it eliminates future lease inflation risk while strengthening control over key market assets, according to the press release. Based on InvestingPro’s Fair Value analysis, Lucky Strike currently appears to be overvalued. Subscribers can access 12+ additional ProTips and comprehensive financial metrics in the Pro Research Report, which provides deep-dive analysis of Lucky Strike’s financial health and growth prospects.
In other recent news, Lucky Strike Entertainment has been the focus of several analyst assessments and company developments. Texas Capital Securities initiated a Buy rating on Lucky Strike with a price target of $14.00, highlighting the company’s potential for positive same-store sales by fiscal year 2026. Conversely, Roth/MKM downgraded Lucky Strike from Buy to Neutral, adjusting the price target to $9.00 due to ongoing fundamental challenges and economic uncertainties. Stifel also lowered its price target to $12.00, maintaining a Buy rating but noting headwinds in the company’s events business.
Truist Securities reiterated its Buy rating with an $11.00 price target, citing improved consumer spending and potential EBITDA growth. Additionally, Lucky Strike announced the appointment of Richard Born and Jason Harinstein to its Board of Directors, bringing expertise in hospitality, finance, and technology. These appointments come as the company seeks to expand its presence in the location-based entertainment sector. Overall, these recent developments reflect diverse analyst perspectives and strategic changes within the company.
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