CEC Entertainment, the parent company of family entertainment center Chuck E. Cheese, has agreed to a merger with Leo Holdings through which the company will return to the public markets.

In a statement, the companies said they believe the new public company, which will be renamed Chuck E. Cheese Brands, will have an initial enterprise value of about $1.4 billion, or 7.5 times its estimated 2019 adjusted EBITDA of about $187 million. The current CEC executive management team would continue to run the company, which would trade on the New York Stock Exchange.

Leo Holdings is a special purpose acquisition company (SPAC) founded by executives of Lion Capital, a private equity firm, to acquire a consumer business. Leo Holdings went public in February 2018.

Apollo Global Management bought the Chuck E. Cheese parent in 2014 for about $948 million. Under the deal, Apollo would not sell any shares and would keep a 51% stake.

CEC would be the first restaurant company to enter the public market in four years.

The companies said the proceeds would be used to pay down debt. According to company filings, CEC Entertainment had $978.9 million in outstanding debt as of Dec. 30, 2018.

CEC Entertainment reported preliminary same-store sales growth of 7.7% in the first quarter of 2019. CEO Tom Leverton said growth was primarily driven by the launch of its “All You Can Play” product that lets parents buy a period of time for their children to play games rather than buying tokens.

“In CEC we have secured an extremely attractive acquisition,” Lyndon Lea, chairman and CEO of Leo Holdings, said in a statement. “Not only because of the strength of the brand, but the financial characteristics of low-risk growth through existing site refurbishments, 20% adjusted EBITDA margins, and high cash-flow conversion make for a compelling investment.”

Citigroup Global Markets was the financial advisor, capital markets advisor, and private placement agent for Leo Holdings. Jefferies was financial advisor and capital markets advisor to CEC.

The deal is expected to close in the second quarter of 2019.

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