Transaction Provides Significant Value for Shareholders and Strong
Partner to Support CEC’s Future Growth
IRVING, Texas & NEW YORK--(BUSINESS WIRE)--Jan. 16, 2014--
An affiliate of Apollo Global Management, LLC (NYSE:APO) (together with
its consolidated subsidiaries, “Apollo”) and CEC Entertainment, Inc.
(NYSE:CEC) (“CEC”) today announced that they have entered into a
definitive merger agreement (the “Merger Agreement”) whereby Apollo, a
leading global alternative investment manager, will acquire CEC, the
nationally recognized leader in family dining and entertainment which
operates 577 Chuck E. Cheese’s stores, for approximately $1.3 billion,
including the assumption of the Company’s outstanding debt.
Apollo’s $54.00 per share all cash offer represents a premium of
approximately 25% over CEC’s closing share price on January 7, 2014, the
last trading day prior to media speculation regarding a possible
transaction and a premium of approximately 36% over the twelve-month
volume weighted average share price for the period ending January 7,
The announcement follows a thorough review of strategic alternatives
undertaken by the CEC Board of Directors to maximize shareholder value.
The transaction was unanimously approved by the CEC Board, which
recommends that CEC shareholders tender their shares in the offer.
"We are pleased to have reached this agreement with Apollo, which
maximizes value for all of our shareholders," said Richard M. Frank,
Executive Chairman of CEC. "This transaction represents the successful
conclusion of our extensive review of strategic alternatives."
“We are excited about this transaction with Apollo, as it recognizes the
value of CEC’s global brand, strong cash flows and growth prospects
while providing our shareholders with an immediate and substantial
premium,” said Michael H. Magusiak, President and Chief Executive
Officer of CEC. “Apollo brings significant industry expertise and
financial resources, and we look forward to working with them to further
grow CEC domestically and internationally.”
“This transaction with CEC gives us the opportunity to partner with the
proven leader in family dining and entertainment,” said Scott Ross,
Partner at Apollo Global Management. “Across the U.S., and increasingly
around the world, the Chuck E. Cheese’s brand represents quality, safe
and fun family entertainment."
“We look forward to partnering with CEC’s exceptional management team,
talented employees and franchise partners to support the continued
growth of the Company," said Lance Milken, Partner at Apollo Global
The transaction will be implemented through a cash tender offer at
$54.00 per share. The transaction is conditioned upon, among other
things, satisfaction of the minimum tender condition of more than 50
percent of the Company's common shares, the receipt of the Federal Trade
Commission's approval under the Hart-Scott-Rodino (HSR) Antitrust
Improvements Act of 1976, and other customary closing conditions. Under
the terms of the agreement, the Company may solicit superior proposals
from limited third parties until January 29, 2014. There can be no
assurances that this process will result in a superior proposal, and the
Company does not intend to discuss any developments with regard to this
process unless the Company's Board of Directors makes a decision with
respect to a potential superior proposal.
Goldman, Sachs & Co. is serving as financial advisor to the Company, and
Weil, Gotshal & Manges LLP is serving as the Company’s legal advisor.
Deutsche Bank Securities Inc., Morgan Stanley and UBS Securities LLC are
serving as financial advisors to Apollo, and, together with Credit
Suisse, provided debt financing commitments. Wachtell Lipton, Rosen &
Katz and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as
Apollo’s legal advisors.
About CEC Entertainment, Inc.
For more than 30 years, CEC Entertainment (NYSE: CEC) has served as the
nationally recognized leader in family dining and entertainment and the
place Where a Kid can be a Kid®. The company and its franchisees operate
a system of 577 Chuck E. Cheese’s stores located in 47 states and 10
foreign countries or territories. Currently, 522 locations in the United
States and Canada are owned and operated by the company. CEC
Entertainment, Inc. and its franchises have the common goal of creating
lifelong memories for families through fun, food and play. Each Chuck E.
Cheese’s features musical and comic robotic entertainment, games, rides
and play areas, as well as a variety of dining options including pizza,
sandwiches, wings, appetizers, a salad bar and desserts. Committed to
providing a fun, safe environment, Chuck E. Cheese’s helps protect
families through industry-leading programs such as Kid Check®.
Chuck E. Cheese’s aims to promote positive, lifelong memories inside and
outside of its stores. In addition to providing a fun entertainment
experience for millions of families across the world, Chuck E. Cheese’s
has donated more than $10 million to schools through its fundraising
programs. For more information, see the company's website at www.chuckecheese.com
or connect with them on Facebook,
About Apollo Global Management
Apollo (NYSE: APO) is a leading global alternative investment manager
with offices in New York, Los Angeles, Houston, London, Frankfurt,
Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under
management of approximately $113 billion as of September 30, 2013, in
private equity, credit and real estate funds invested across a core
group of nine industries where Apollo has considerable knowledge and
resources. For more information about Apollo, please visit www.agm.com.
Additional Information and Where to Find It
The tender offer for the outstanding shares of CEC Entertainment, Inc.
referenced in this press release has not yet commenced. This
announcement is for informational purposes only and is neither an offer
to purchase nor a solicitation of an offer to sell shares, nor is it a
substitute for the tender offer materials that Apollo and its
acquisition subsidiary will file with the U.S. Securities and Exchange
Commission (the “SEC”) upon commencement of the tender offer. At the
time the tender offer is commenced, Apollo and its acquisition
subsidiary will file tender offer materials on Schedule TO, and CEC
Entertainment, Inc. thereafter will file a Solicitation/Recommendation
Statement on Schedule 14D-9 with the SEC with respect to the tender
offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A
RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS)
AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF SHARES OF CEC ARE URGED TO READ THESE DOCUMENTS
CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION THAT HOLDERS OF CEC SECURITIES SHOULD CONSIDER BEFORE MAKING
ANY DECISION REGARDING TENDERING THEIR SECURITIES. The Offer to
Purchase, the related Letter of Transmittal and certain other tender
offer documents, as well as the Solicitation/Recommendation Statement,
will be made available to all holders of shares of CEC at no expense to
them. The tender offer materials and the Solicitation/Recommendation
Statement will be made available for free at the SEC’s web site at www.sec.gov.
Additional copies may be obtained for free by contacting CEC
Entertainment, Inc. at 4441 W. Airport Freeway, Irving, TX 75062,
Attention: Tiffany B. Kice, (972) 258-4525.
In addition to the Offer to Purchase, the related Letter of Transmittal
and certain other tender offer documents, as well as the
Solicitation/Recommendation Statement, CEC files annual, quarterly and
current reports and other information with the SEC. You may read and
copy any reports or other information filed by CEC at the SEC public
reference room at 100 F Street, N.E., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the
public reference room. CEC’s filings with the SEC are also available to
the public from commercial document-retrieval services and at the
website maintained by the SEC at http://www.sec.gov.
Statements herein regarding the proposed transaction among Apollo and
CEC, future financial and operating results, benefits and synergies of
the transaction, future opportunities for the combined company and any
other statements about future expectations and the intent of any parties
about future actions constitute “forward-looking statements” as defined
in the federal securities laws. Forward-looking statements may be
identified by words such as “believe,” “expects,” “anticipates,”
“projects,” “intends,” “should,” “estimates” or similar expressions.
Such statements are based upon current beliefs, expectations and
assumptions and are subject to significant risks and uncertainties.
There are a number of important factors that could cause actual results
or events to differ materially from those indicated by such
forward-looking statements, including, among other things, risks
relating to the expected timing, consummation, and financial benefits of
the tender offer and the merger. Apollo and CEC believe these
forward-looking statements are reasonable; however, undue reliance
should not be placed on any forward-looking statements, which are based
on current expectations. All written and oral forward-looking statements
attributable to Apollo and CEC or persons acting on Apollo’s or CEC’s
behalf are qualified in their entirety by these cautionary statements.
Further, forward-looking statements speak only as of the date they are
made, and Apollo and CEC undertake no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results over time unless required by law. Past financial or operating
performance is not necessarily a reliable indicator of future
performance and you should not use our historical performance to
anticipate results or future period trends.
Additional factors that may affect future results are contained in CEC’s
filings with the Securities and Exchange Commission (the “SEC”),
including its Annual Report on Form 10-K for the year ended December 31,
2012 and subsequent filings, which are available at the SEC’s Web site http://www.sec.gov.
The information set forth herein speaks only as of the date hereof, and
any intention or obligation to update any forward-looking statements as
a result of developments occurring after the date hereof is hereby
disclaimed unless required by law.
Source: CEC Entertainment, Inc. and Apollo Global Management, LLC
CEC Entertainment, Inc.
Director, Corporate Communications
Tiffany B. Kice, 972-258-4525
President, Chief Financial Officer & Treasurer
Global Management, LLC
Gary M. Stein,
Head of Corporate Communications
Investor Relations Manager
Joele Frank, Wilkinson Brimmer Katcher