It’s where “a kid can be a kid.†Can it also be where a private equity firm reaps a big return?
Leon Black’s Apollo Global Management announced on Thursday that it had agreed to acquire CEC Entertainment, which operates 577 Chuck E. Cheese’s restaurants, for $1.3 billion, including the assumption of debt.
The offer of $54 a share represents a premium of 25 percent over CEC’s closing stock price on Jan. 7 before “media speculation regarding a possible transaction.†The stock closed on Wednesday at $48.43. The Financial Times earlier reported that Apollo had clinched a deal.
CEC, based in Irving, Tex., has about $370 million in debt, according to Standard & Poor’s Capital IQ.
Parents of young children in 47 states know Chuck E. Cheese and its unusual combination of robotic entertainment, games, rides, play areas - and yes, food: pizza, sandwiches, wings, salads and desserts and the like. The first restaurant was in San Jose, Calif., in 1977. It was started by Nolan Bushnell, a founder of Atari, the video game company â€" and one of the first and few bosses that Steven P. Jobs ever had.
Goldman Sachs and the law firm of Weil, Gotshal & Manges are advising CEC. Deutsche Bank, Morgan Stanley and UBS are serving as financial advisers to Apollo, and, together with Credit Suisse, provided debt financing commitments Wachtell Lipton, Rosen & Katz and Paul, Weiss, Rifkind, Wharton & Garrison are serving as Apollo’s legal advisers.
