Once set to return to the public equity markets, private equity-backed CEC Entertainment Inc. has instead moved into Chapter 11 as it works to restructure its balance sheet.
The Irving, Texas, parent of the Chuck E. Cheese and Peter Piper Pizza entertainment center and restaurant chains submitted a petition on Wednesday, June 24, in the U.S. Bankruptcy Court for the Southern District of Texas in Houston. The Apollo Global Management Inc. (APO) portfolio holding plans to continue restructuring talks with stakeholders and landlords as it deals with the effects of Covid-19-related venue closures.
CEC previously formed a special board committee to evaluate restructuring and financing opportunities and revealed a key employee retention plan for its top executives.
It follows numerous other restaurant chains into Chapter 11 such as HopCat (June 3), Le Pain Quotidien (May 27) and TooJay’s Management LLC (April 29), and others such as California Pizza Kitchen Inc. and Checkers Drive-In Restaurants Inc. are near default or reportedly exploring a restructuring.
Apollo in January 2014 took Chuck E. Cheese private, paying $1.3 billion for the children’s entertainment brand founded in 1977. In October 2014, CEC Entertainment added on Southwest- and Mexico-focused Peter Piper Pizza in a $113.1 million deal.
Special purpose acquisition company Leo Holdings Corp. (LHC) in April 2019 agreed to acquire Chuck E. Cheese in a $1.4 billion deal. The transaction was terminated three months later after the determination that the combined company would not have a minimum $250 million of net available cash, and Leo now plans to combine with Clairvest Group LLC-backed Digital Media Solutions LLC in a $757 million deal.
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