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Apollo readies $725M leveraged loan backing Chuck E. Cheese LBO

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Apollo readies $725M leveraged loan backing Chuck E. Cheese LBO

chuck e cheeseDeutsche Bank, Credit Suisse, Morgan Stanley, and UBS have scheduled a bank meeting for 2:00 p.m. EST on Tuesday, Feb. 4 to launch a $725 million, seven-year covenant-lite term loan backing Apollo Global Management’s $1.3 billion acquisition of CEC Entertainment, according to sources.

Price talk is not yet available. Financing for the LBO also includes a $150 million, five-year revolving credit facility and $305 million of unsecured notes. Credit Suisse will be left lead on the adjoining bond deal.

CEC, which operates pizza and family entertainment chain Chuck E. Cheese’s, announced earlier this month that Apollo agreed to purchase the company, for $54 per share, or $1.3 billion, including the assumption of debt.

The sale was the result of a strategic review aimed at boosting revenue and profit. Revenue dipped slightly in the fiscal third quarter ended Sept. 29, 2013, to $195.9 million, from $196.6 million in the comparable 2012 quarter, while operating income fell to $13.2 million from $14.5 million. – Kerry Kantin/Abby Latour