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CEC Entertainment sets Tuesday launch for $875 million credit facility
By Sara Rosenberg
New York, Jan. 31 - CEC Entertainment Inc. scheduled a bank meeting for 2 p.m. ET on Tuesday to launch its proposed $875 million credit facility, according to sources.
Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and UBS Securities LLC are the lead banks on the debt.
The facility consists of a $150 million five-year revolver and a $725 million seven-year covenant-light term loan.
Official price talk is not yet available, sources said.
Based on filings with the Securities and Exchange Commission, expected revolver pricing is Libor plus 325 basis points with a 50 bps unused fee, and the term loan is expected at Libor plus 350 bps with a 1% Libor floor and 101 soft call protection for six months.
Proceeds will be used to help fund the buyout of the company by Apollo Global Management LLC for $54.00 per share in a transaction valued at about $1.3 billion, including the assumption of debt.
Other funds for the transaction are expected to come from $335 million of equity and $305 million of senior notes.
The notes are backed by a commitment for a $305 million one-year bridge loan that is priced at Libor plus 675 bps, stepping up by 50 bps every three months. The debt has a 1% Libor floor.
Closing is subject to a minimum tender condition of more than 50% of the company's common shares, the receipt of the Federal Trade Commission's approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.
CEC is an Irving, Texas-based operator of Chuck E. Cheese's family dining and entertainment stores.
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