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DALLAS-Although Dave & Buster’s Inc.’s third quarter was difficult from an earnings perspective, the chain has arranged to be acquired by an affiliate of Wellspring Capital Management LLC for $18.05 per sharein cash. The price represents a per share premium of roughly 10%.

The total value of the transaction, which has already been approved by the Dave & Buster’s board of directors, is roughly $375 million, including the assumption of Dave & Buster’s debt. The merger is expected to be completed during the second quarter of 2006, according to a statement from Dave & Buster’s. The buyout announcement sent the chain’s shares soaring 14.7% to $17.45 per share.

Dave & Buster’s CEO Buster Corley said in a statement that the buyout offers shareholders an opportunity to realize value during a time when the company “has been challenged to perform up to expectations.” Theacquisition announcement was combined with the company’s third quarter financial results, which indicated that the Jillian’s stores are dragging down the entire chain, which consists of 46 locations inthe US and Canada.

Dave & Buster’s swung to a net loss $3.2 million, or 23 cents per share, for the quarter, despite the fact that total revenue increased 25.7% to $105.6 million from $84 million in the same period last year.Moreover, comp-store sales increased 3.2% percent for the quarter. During the quarter, the chain posted an operating loss of $3.6 million compared to operating income of $0.7 million in the prior year.

Company executives attributed the poor performance to “continued weakness” in the Jillian’s brand, which accounted for 60% of the company’s operating loss. As a result of the poor third quarter earnings, the company decreased its earnings guidance for the restof its fiscal year.

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