The parent of Chuck E. Cheese has begun preparations for an initial public offering (IPO) that could value the U.S. restaurant chain at more than $1 billion, including debt, people familiar with the situation said on Tuesday.
The IPO would be a bet that Irving, Texas-based Chuck E. Cheese's arcade games and kid-focused activities will differentiate it in the minds of investors from other more commoditized restaurant chains that have failed to whet their appetite.
Chuck E. Cheese's private equity owner, Apollo Global Management, has initiated conversations with banks about an IPO that could come in the second half of 2017, though it has not yet hired underwriters, the people said.
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Chuck E. Cheese was taken private by Apollo in 2014 for $1.3 billion, including debt. It has since sought to broaden its appeal beyond children, expanding its alcohol offerings for adults.
Chuck E. Cheese was founded in 1977 by Nolan Bushnell, the founder of video game company Atari and one of the first bosses of Apple founder Steve Jobs.
The company and its franchisees now operate a system of 603 Chuck E. Cheese and 144 Peter Piper Pizza stores, with locations in 47 U.S. states and 11 other countries.
