Chuck E Cheese is working with investment bank Goldman Sachs to attract bids from private equity firms. Credit: iJeab/ shutterstock.com.

CEC Entertainment’s restaurant brand Chuck E Cheese is considering the sale of the business, Reuters has reported.

A potential deal could value Chuck E Cheese at more than $1bn, based on its peers’ valuation metrics.

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The restaurant is working with investment bank Goldman Sachs to attract bids from private equity firms for stakes or the full sale of the business.

The restaurant chain is also seeking interest from peers such as Dave & Busters Entertainment.

Chuck E Cheese’s parent company CEC Entertainment said that the potential acquirers could generate revenue of $1.2bn and $195m in earnings before interest, taxes, depreciation and amortisation in 2023.

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However, there is no certainty that a deal will be signed by the parties.

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In June 2020, CEC Entertainment and its domestic affiliates filed for Chapter 11 bankruptcy due to the impact of the Covid-19 pandemic.

In December 2020, the company emerged from bankruptcy after ownership was transferred to its creditors who agreed to eliminate debt of $705m from its balance sheet.

The creditors included investment firms Monarch Alternative Capital and Redan Advisors.

CEC was acquired by Apollo Global Management in 2014 in a deal worth $1.3bn, including debt.

Chuck E Cheese and its franchisees currently operate 600 locations and more than 120 Peter Piper Pizza locations globally.

The restaurant also owns the delivery-only brand, Pasqually’s Pizza & Wings.