Why Bowling Center Operator Bowlero's Shares Are Rising Today

Bowlero Corp BOWL shares are surging after the company said it completed a $432.9 million sale-leaseback transaction with VICI Properties Inc VICI.

The company transferred land and real estate assets of 38 Bowling Entertainment Centers across 17 states.

The transaction was structured as a tax-deferred capital contribution, and proceeds will be used to continue Bowlero's growth plan.

Bowlero entered into a triple-net master lease agreement with VICI. The lease will have an initial total annual rent of $31.6 million, representing an acquisition cap rate of 7.3%, and an initial term of 25 years, with six 5-year tenant renewal options.

Bowlero expects the lease to be treated as a long-term lease obligation with no effect on EBITDA.

"With this transaction, we also extended the duration and diversified the sources of our capital, strengthening our overall financial position," said Executive Vice Chairman Brett Parker.

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Price Action: BOWL shares are trading higher by 5.50% at $11.50 on the last check Friday.