IRVING, Texas — Got some spare tokens? Chuck E. Cheese is returning to the public markets.
CEC Entertainment Inc., which owns 750 Chuck E. Cheese and Peter Piper Pizza stores in the U.S. and abroad, expects to begin trading on the New York Stock Exchange under the ticker “CEC” in the second quarter.
It’s the first time since 2015 that a restaurant chain will go public in the U.S. The last one was Brazilian steakhouse chain Fogo de Chao.
Dave & Buster’s Entertainment, a food-and-arcade chain similar to Chuck E. Cheese, has more than tripled its share price to $53 since it went public in 2014. That was the same year CEC was bought by private equity firm Apollo Global Management and taken private.
On Monday, CEC said it would combine with Leo Holdings Corp., a special purpose acquisition company backed by London-based private equity firm Lion Capital. Leo will be renamed Chuck E. Cheese Brands Inc. CEC’s executive team — including CEO Tom Leverton — will continue to lead the company from its current headquarters in Irving, Texas.
Apollo Global Management will be the company’s largest shareholder owning about 51%. Lyndon Lea, a founding partner of Lion Capital, and Andrew Jhawar, a senior partner with Apollo, will be co-chairman of Chuck E. Cheese’s board.
CEC anticipates an initial valuation of $1.4 billion. The company reported revenue of $896 million in its 2018 fiscal year.
The company got its start in 1977, when Atari cofounder Nolan Bushnell opened Chuck E. Cheese’s Pizza Time Theatre in San Jose, California. The restaurant featured a cast of animatronic characters led by Chuck E. Cheese, a plucky rat in a bowler hat.
But the chain was struggling by 2014. Under Apollo, it has remodeled stores, introduced updated technology like gaming cards and revamped its menu, including adding coffee drinks and more premium beer and wine. It also refocused advertising to appeal more directly to parents.
The Associated Press