Chuck E. Cheese (CEC Entertainment, LLC), the restaurant chain that emerged from bankruptcy three years ago, is exploring a sale amid acquisition interest, according to people familiar with the matter. The Irving, Texas-based company, known for its arcade games and rat mascot Charles Entertainment ?Chuck E.? Cheese, is working with investment bank The Goldman Sachs Group, Inc. (NYSE:GS) on an auction process that could attract private equity firms as well as peers such as Dave & Buster's Entertainment, Inc. (NasdaqGS:PLAY), the sources said.

CEC Entertainment, the parent company of Chuck E. Cheese, has told potential acquirers it expects to generate around $1.2 billion in revenue and $195 million in earnings before interest, taxes, depreciation and amortization (EBITDA) this year, the sources added. Based on the valuation metrics of its peers, the company could fetch well over $1 billion in a sale, according to the sources. The sources cautioned that no deal is certain and asked not to be identified because the matter is confidential.

Goldman Sachs declined to comment. CEC Entertainment and Dave & Busters did not immediately respond to requests for comment. Dave & Busters Entertainment could be a possible suitor.