Report: Chuck E. Cheese Going Public
A report just released indicates that the pizza place that focuses on kids with its arcade center is considering a re-entrance into the public market.
Earlier this week, a report said that Chuck E. Cheese’s parent CEC Entertainment started preparing for its initial public offering.
The report cited sources that are familiar with the preparations for the IPO, and said the chain’s owner, private equity firm Apollo Global Management, started talking with banks about a possible IPO that could possibly come as soon as the second six months of 2017.
The report said the company would value the pizza, arcade chain at over $1 billion including its debt.
This would be the second go by CEC at an IPO, the company went public for the first time back in 1989, at the time is used the name ShowBiz Pizza time. In 1998, the company changed its name to its current one.
Growth in revenue started to stagnate and finally decline during 2008 and by the time 2014 came, the business was searching for strategic alternatives.
Apollo then bought out the company in January of 2014 in a deal of all cash for $1.3 billion, including its debt.
Under the ownership of Apollo, CEC has expanded operations and has 598 locations of Chuck E. Cheese and another 114 Peter Piper Pizza locations across 47 states as well as 12 countries.
An increasing number of stores are not the only thing changed under Apollo. Recently, Chuck E. Cheese revamped its entire menu and added wifi free into its stores in an attempt to attract more 18 and over customers.
Thomas Leverton the CEO at CEC said that the average child that comes into Chuck E. Cheese wants to return multiple times each year buy only averages about 3 times each year and that is due to mom and dad vetoing the other 8 times.
The efforts helped to give a moderate increase to its sales. Despite its privately held status, CEC has continued posting its results for each quarter and in its November release of quarterlies, CEC posted revenue of $228.1 million and an increase of 3.5% in sales at same stores.
Due to costs of store operations, the company release showed a net loss of $2.4 million for the quarter.