PE HUB Wire Highlights, 4.8.19


Photo of Luisa Beltran, PE HUB Senior Editor, courtesy of Buyouts Insider.

Apollo’s Chuck E Cheese to merge with Lion Capital SPAC; Rose to retire from StepStone; Hamilton Lane announces promotions

Greetings, Hubsters! How is everyone? I woke up a bit under the weather (tonsils, again).

I remember when SPACs were looked down upon. Now, they’ve become a very popular tool for private equity exits. This morning, CEC Entertainment Inc, which owns Chuck E Cheese and Peter Piper Pizza, said it would merge with Leo Holdings Corp, a SPAC. CEC is backed by Apollo Global Management LLC and will trade on the NYSE under the ticker CEC.

CEC will have an initial enterprise value of about $1.4 billion, or 7.5x estimated 2019 adjusted EBITDA of $187 million. Apollo, which acquired Chuck E Cheese in 2016 for $1.3 billion, isn’t exiting and will have 51 percent of the combined company once the deal closes.

The interesting part? Leo Holdings is backed by Lion Capital, the consumer focused PEfirm out of the U.K. See our brief here.

In another deal, Capitol Investment Corp IV is buying Nesco from Energy Capital PartnersReuters valued the deal at $1.1 billion. Nesco is an aerial lifts and cranes rental company. Capitol Investment Corp IV is the fourth SPAC from Mark EinSee our brief here.

The IPO market is hot. This morning, the Wall Street Journal reported that Pinterest will begin its roadshow to go public today. We’re all still waiting for Uber‘s IPO.

StepStone Group, the private market specialist, is also considering an IPO, I’m hearing. The offering is still about a year away, I’m told. Hamilton Lane, its larger rival, is already public and raised $200 million in a February 2017 IPO. Hamilton Lane has seen its stock price nearly triple since going public.

That said, Jay Rose, one of the original partners of StepStone Group, is retiring from the firm later this year. Rose is only 44. Now retiring so young seems shocking but it’s not uncommon for PE executives to leave firms at this age. I’m very curious about Rose’s next act. Find out what his plans are here.

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