Chuck E. Cheese is cashing in all its tickets in (another) IPO. The video-game-pizza-parlor chain, private since it was acquired by Apollo Global management 5 years ago for $1.3B, will be the first “new” restaurant chain to list publicly in the US since 2015.
For people whose idea of heaven includes gigantic animatronic mice, pizza grease-lubricated ball pits, and unlimited B-rate video games, Chuck E. Cheese’s has served up a slice of heaven for 42 years.
But things haven’t always gone smoothly for Chuck…
It ain’t easy bein’ Cheese E.
Atari founder Nolan Bushnell created “Pizza Time Theatre” in 1977 to make Pong popular with kids, choosing Chuck only after “Rick Rat” got shot down. Cheese’s grew with the gaming industry, going public in ’81.
But 2 years later Chuck — who, thanks to the video game crash of ’83 (AKA the Atari shock), was down to his last buck — declared bankruptcy.
Chuck sold to competitor Showbiz, which ran the cheesy chain as CEC Entertainment until 2014, when it was acquired.
A familiar furry face back on the market
Under Apollo’s guidance, Chuck cleaned up his mouse-houser, replacing tokens with cards and adding menu items including coffee and booze.
Queso Holdings — which owns CEC Entertainment’s 600 global Chuck E. Cheese’s — will merge with British private equity spinoff Leo Holdings (Apollo, of course, keeps the largest 51% slice of the pie for itself).
Sales in the 4th quarter of last year grew 3.3% and were expected to grow another 7.7% in the first quarter of this year. The new Chuck will trade on the NYSE under the ticker “CEC” in the 2nd quarter at an expected valuation of $1.4B.