Chuck E. Cheese’s plans merger, public trading

CEC owner Apollo will retain 51% of new company


Ron Ruggless, Nation's Restaurant News

Apr 08, 2019


CEC Entertainment Inc., parent to the Chuck E. Cheese's and Peter Piper Pizza brands, has agreed to merge with Leo Holdings Corp., a special purpose acquisition “shell” company founded by executives of British private-equity firm Lion Capital, with the intent of going public again later this year, the firms announced Monday.


The deal is expected to be completed in the second quarter, and CEC owner Apollo Capital Management LLC, which took Chuck E. Cheese’s private and bought Peter Piper Pizza in separate 2014 deals, will retain 51% ownership in Leo Holdings, which plans to change its name to Chuck E. Cheese Brands Inc. and offer shares on New York Stock Exchange.


The companies said the merger of CEC parent Queso Holdings and Leo Holdings has an enterprise value of $1.4 billion. The 750-unit CEC, which includes reported sales of $896 million in fiscal 2018. The boards of both Queso and Leo has approved the proposed deal, and Leo shareholders will vote on the plan.


“CEC has proven resiliency,” said Lea Lyndon, chair and CEO of Leo Holdings and a founder of Lion Capital, in a webcast Monday. “It’s been around for 42 years. … This is a very defensive play with very attractive cash characteristics.”


Lion Capital, which in February 2018 raised $200 million for the Leo Holdings SPAC, has invested in such foodservice brands as Round Table Pizza, Marble Slab Creamery, Great American Cookies, Gordon Ramsay restaurants and Wagamama.


Apollo’s investment holdings include such foodservice brands as Qdoba, CKE Restaurants and Sprouts Farmers Market.


Upon completion of the merger, Lyndon said...


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