Restaurant chain Chuck E. Cheese explores sale-sources
15/12/2023 21:53
By Abigail Summerville
Dec 14 (Reuters) - Chuck E. Cheese, the U.S. restaurant
chain that emerged from bankruptcy three years ago, is exploring
a sale amid acquisition interest, according to people familiar
with the matter.
The Irving, Texas-based company, known for its arcade games
and rat mascot Charles Entertainment "Chuck E." Cheese, is
working with investment bank Goldman Sachs GS.N on an auction
process that could attract private equity firms as well as
peers such as Dave & Busters Entertainment PLAY.O , the sources
said.
CEC Entertainment, the parent company of Chuck E. Cheese,
has told potential acquirers it expects to generate around 1.2
billion in revenue and $195 million in earnings before interest,
taxes, depreciation and amortization (EBITDA) this year, the
sources added. Based on the valuation metrics of its peers, the
company could fetch well over $1 billion in a sale, according to
the sources.
The sources cautioned that no deal is certain and asked not
to be identified because the matter is confidential. Goldman
Sachs declined to comment. CEC Entertainment and Dave & Busters
did not immediately respond to requests for comment.
Private equity firm Apollo Global Management Inc APO.N
acquired Chuck E. Cheese in 2014 for $1.3 billion, including
debt. The company filed for bankruptcy in June 2020 after the
onset of the COVID-19 pandemic weighed on its business.
Chuck E. Cheese emerged from bankruptcy in December 2020
after ownership was passed to its creditors, including
investment firms Monarch Alternative Capital and Redan Advisors,
who agreed to eliminate $705 million in debt from its balance
sheet.
The company and its franchisees operate nearly 600 Chuck E.
Cheese locations and over 120 Peter Piper Pizza locations
globally. It also owns virtual kitchen concept Pasqually's Pizza
& Wings.
(Reporting by Abigail Summerville in New York; Editing by
Daniel Wallis)
((abigail.summerville@thomsonreuters.com;))