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Dave & Buster’s climbs in debut on Nasdaq

Dave & Buster’s saw its shares rise on its first day as a publicly traded company.

The Nasdaq-traded stock (ticker: PLAY) added $1.28, or 8 percent, to $17.28 in Friday morning trading.

The Dallas company raised about $94.1 million from its initial public offering of 5.9 million shares. The offering was priced at $16 a share, at the low end of the projected range of $16 to $18.

Dave & Buster’s Entertainment Inc. is the parent company of Dave & Buster’s Inc., a chain of restaurants/game arcades. The company was taken private in 2006 by Wellspring Capital Partners and HBK Main Street Investors, which sold it four years later to private-equity firm Oak Hill Capital.

Oak Hill Capital is not selling shares in the IPO and will remain the majority shareholder.

Dave & Buster’s is giving underwriters a 30-day option to buy up to an additional 882,352 shares. The company is using the IPO proceeds to pay down $529 million in debt as of Aug. 3.

The offering culminates a long journey for Dave & Buster’s.

Founded in Dallas in 1982, Dave & Buster’s has grown into a chain with 70 stores in the U.S. and Canada. It stands out among comparable chains in that customers can play arcade games after feasting on sandwiches and steaks. Despite a history of losses, the company turned a $2.2 million profit in its fiscal year that ended in February.

The IPO is also being used to enhance employee loyalty. Chief Executive Stephen M. King announced last month that 2.5 percent of the shares on offer would be set aside for employees, “at the same price, and at the same time, as Wall Street,” through the brokerage firm Loyal3, which caters to individuals.

Under Oak Hill’s ownership, Dave & Buster’s filed for an IPO in 2011 but ended up canceling the plans the next year, citing “continued volatility” in the markets.

Since then, the company has remodeled some stores and opened new ones, helping improve its finances.

“It’s been good that they waited” to go public, said Kathleen S. Smith, a principal of Renaissance Capital, which manages an exchange-traded fund that tracks IPOs.

This report includes material from The Associated Press and The New York Times.

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