Dive Brief:
- CEC Entertainment, parent company of Chuck E. Cheese and Peter Piper Pizza, is reportedly exploring a sale, Reuters reported last week.
- The company partnered with Goldman Sachs on an auction that may attract private equity firms and other eatertainment companies like Dave & Buster’s, the publication said, citing people familiar with the matter.
- This is not the first time the company has been rumored to seek a sale. It reportedly sought buyers after it declared bankruptcy in June 2020. CEC also tried to go public in 2019 through a business combination, but that failed for unknown reasons.
Dive Insight:
Three years after it emerged from bankruptcy, CEC Entertainment, which Apollo Global has owned since 2014, is expanding its concepts into new countries and regions, as well as within the U.S. According to Reuters, the company has about $1.2 billion in revenue and $195 million in EBITDA, and the company could be worth about $1 billion in a sale. Pre-pandemic, the chain had revenues of over $912 million. Last year, it opened its first location in Suriname and signed agreements to expand further in the Dominican Republic.
Chuck E. Cheese has undergone a remodel program, opening its 200th remodeled location at the start of 2023. The redesign includes more games, an interactive dance floor, and large-format video wall and screens. The company planned to complete another 100 remodels this year and to redesign all of its stores in the next three years. The Peter Piper Pizza brand has been opening a fast casual brand, Peter Piper Express, which includes a broader menu and within a roughly 1,000-square-foot restaurant.
If CEC Entertainment sells itself, it would be among the largest restaurant sales recently. Outside of Roark’s proposed $9.5 billion buy of Subway, individual transactions have been under $1 billion. M&A activity has been largely muted since the end of 2022 following high interest rates. CEC’s financial turnaround and growth strategy could make it an attractive buy, especially with more consumers seeking eatertainment occasions in the post-COVID era.
