Bobby Lavan: We’re building an infrastructure for it. Right now, you’ll start seeing sort of the more prominent Bowleros converting that sits in cities that have a lot of investment community, but we’re starting slow, but we are rolling it out.
Michael Kupinski: Perfect. And just one additional question. If you can add a little bit of more color on Raging Waves? I know there’s a lot for you to learn about waterparks, but do you think that there’s a better return on waterparks than possibly opening new bowling centers? And then, can you add more color on the possible rollup opportunity in waterparks in general?
Thomas Shannon: Well, I’m not new to the waterpark space. I am as an owner, but I look to acquire a location in Florida that was very similar to the one that we acquired, similar dynamic, elderly seller had been around for a long time. And I wasn’t able to buy that center because I didn’t understand the concept of a sale leaseback, and I could never get to the seller’s price. Our partner, the management partner on this asset, Raging Waves that we bought, was actually the guy who bought it. He had previously been the CEO of Six Flags, left Six Flags, and then started buying these regional assets. He took that location from $11 million in revenue to $25 million, and EBITDA exploded. So, unfortunately, I sat on the sidelines. I tried to buy that asset for 11 years and couldn’t quite get there.
And I got intellectually arbitrage because this other guy understood the sale leaseback market and I didn’t. Well, now I understand the sale leaseback market. And so, if you think about what the potential is or the likely outcome of this asset, once we optimize EBITDA, it would be a perfect asset to flip to the sale leaseback market. And even at these current cap rates, which are not attractive, we would probably end up with proceeds in excess of the purchase price, and we’d still own on order of 50% of the cash flow. So, the return would be infinite. So, I think from a return profile, the returns of doing an acquisition like this are far better actually than doing a bowling alley new build. The other thing that’s significant is it’s more dollars.
So, we’re able to put more dollars to work with effectively the same effort. And I think that’s important as we want to continue to scale. Doing individual bowling acquisitions at this point doesn’t really move the needle. We have to do more and more of them to maintain the same percentage increase as the asset base grows in size. So, what are the advantages of doing these other things is you end up with assets that when optimized can be doing $12 million or $15 million of EBITDA versus $2 million or $3 million, or in some cases, $4 million. So, I think that’s an important way of looking at the business. We are in no way abandoning or walking away from the bowling business. I want to make that perfectly clear. But we have the wherewithal from a management perspective and from a financial perspective of doing more than just bowling at this point.
And there’s a whole very interesting world where the mechanics of the business are very similar to those of the bowling business, where it’s not a leap into the unknown, where we can avail ourselves of them on an opportunistic basis. And I think you’re going to find that this is going to be — at the low end, this would be a unlevered 20%-plus performer, and with leverage or a sale leaseback would be infinite return. So, like I’ve said earlier, these are all good opportunities. We pick and choose from the best and work our way down. But the water — this waterpark investment is in no way a trade down from a return perspective versus buying or building bowling alleys. I want to make that perfectly clear.
Michael Kupinski: Perfect. Thank you for that color. That’s all I have.
Thomas Shannon: Thank you. And by the way, I would encourage all of you to look online, look at Google, look at what this waterpark looks like, where it’s located, et cetera. It’s a first-class, incredibly well-maintained, and beautiful asset. This isn’t just some regional collection of slides. This is themed at a very high level. And I think we were very, very fortunate to be able to get this asset. I’d encourage you to diligence it yourselves and see just what we bought here.
Operator: Ladies and gentlemen, as there are no further questions at this time, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
