Chuck E. Cheese’s has been on the hunt for potential buyers as it has been struggling with slumping sales. Today, Apollo Global Management took on the task, buying parent company CEC Entertainment for $1.3 billion, including the assumption of debt.
Apollo’s offer of $54 per share represents a premium of 11.5 percent over Wednesday’s closing price per Reuters.
On Jan. 7, reports first surfaced that Chuck E. Cheese’s had been working with Goldman Sachs on potential sales options in the previous months. Stocks then skyrocketed, closing on Jan. 8 at $49.58, the highest close the company has experienced since it first began trading on the NYSE in 1990.
“We are excited about this transaction with Apollo, as it recognizes the value of CEC’s global brand, strong cash flows and growth prospects while providing our shareholders with an immediate and substantial premium,” Michael H. Magusiak, the chief executive of CEC, said in a statement.
Apollo’s other investments range from tween jewelry retailer, Claire’s, to whirlpool manufacturer Jacuzzi Brands and digital learning company McGraw-Hill Education. Apollo was first founded in 1990 by billionaire Leon Black.
Chuck E. Cheese has been struggling to say the least. The company saw same-store sales fall 2.1 percent year-over-year in the third quarter and total revenues for the quarter fell 0.4 percent to 195.6 million from 196.6 million a year before.
Chuck E. Cheese’s isn’t the only restaurant chain to brought up in recent months. In December, Darden restaurant chains said it will either sell or spin off Red Lobster. In November, Roark Capital Group, the parent company of food chains such as Cinnabon, Auntie Anne’s and Arby’s, acquired CEK Inc., the parent company of Carl’s Jr. and Hardee’s. The next targets for sale? Possibly Ruby Tuesday and Dave & Busters if word on the street is true.