This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Apollo Bids $1.3B for Chuck E. Cheese's

Stocks in this article: APO CEC GS DRI

NEW YORK ( The Deal)--New York private equity firm Apollo Global Management  (APO) on Thursday agreed to take Chuck E. Cheese's operator CEC Entertainment  (CEC) private for $1.3 billion, or $54 per share in cash, including debt.

The purchase price valued CEC's equity at around $948 million and represented an 11.5% premium over CEC's Wednesday's closing stock price of $48.43. The transaction completes a strategic review process for CEC, the target said, confirming reports that surfaced earlier this month that it hired Goldman Sachs  (GS) to run an auction process.

Irving, Texas-based CEC operates 577 Chuck E. Cheese's restaurants. The chain is known for its children's entertainment centers.

CEC said partnering with Apollo will give it an opportunity to expand even further. "Apollo brings significant industry expertise and financial resources and we look forward to working with them to further grow CEC domestically and internationally," said CEC CEO Michael Magusiak in a statement.

The deal agreement gives CEC a two-week go-shop period through Jan. 29. Sterne Agee Group analyst Lynne Collier valued the purchase price at around 7.4 times the target's $171.6 million in Ebitda and wrote in a Thursday morning research note that higher bids are possible.

The deal comes as private equity interest is picking up steam in the restaurant sector. In November, Apollo sold fast food operator CKE to Atlanta counterpart Roark Capital Group for around $1.7 billion. In October, Centre Partners Management acquired the Captain D's seafood chain from Sun Capital Partners for around $175 million.

Olive Garden operator Darden Restaurants  (DRI) hired Goldman Sachs in December to consider options for its Red Lobster chain, including a spinoff or sale. Industry sources said they expect Red Lobster to be sold to a private equity firm for below $2 billion.

CEC shares opened 12% higher, to $54.49, on Thursday morning, giving it a market capitalization of about $850 million.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs