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Chuck E. Cheese's parent is going public again

Amelia Lucas
  • After a merger with publicly traded Leo Holdings, Chuck E. Cheese's parent will be traded on the New York Stock Exchange under the ticker CEC.
  • The deal is expected to close in the second quarter of 2019.
  • Apollo Global Management took Chuck E. Cheese's parent private in 2014 in a deal valued at $1.4 billion.

Chuck E. Cheese's parent company is returning to the New York Stock Exchange through a merger with a special purpose company, making it the first restaurant company to enter the public market in four years.

Special purpose acquisition companies have no assets but use the proceeds from an IPO, combined with bank financing, to buy and take privately held consumer companies public. Leo Holdings LHC , the SPAC merging with the parent of the children's party chain, was founded by executives of Lion Capital, a British private equity firm, to acquire a consumer business.

Queso Holdings, which owns CEC Entertainment, the parent company of Chuck E. Cheese and Peter Piper Pizza, will trade on the NYSE with the ticker CEC this summer after the deal closes.

The deal is expected to close in the second quarter of 2019. After the deal closes, Leo Holdings plans to change its name to Chuck E. Cheese Brands. CEC Entertainment will be a subsidiary of Chuck E. Cheese Brands.

The company believes that CEC Entertainment will have an enterprise value of $1.4 billion. In fiscal 2018, the company reported net sales of $896 million at its 750 venues across both the Chuck E. Cheese and Peter Piper Pizza brands. More than half of its revenue comes from entertainment and merchandise sales, with the remaining 45 percent coming from its food and beverage segment.

In its first quarter in fiscal 2019, CEC Entertainment reported preliminary same-store sales growth of 7.7 percent.

Private equity firm Apollo Global Management bought Chuck E. Cheese's parent company in 2014 for about $948 billion, taking it private. Apollo will not sell any of its shares as part of the deal and will retain a 51 percent stake in the newly formed company.

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