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Interesting move by Cedar Fair to expand their water park business - they are buying two Schiltterbahn parks (New Braunfels and Galveston), with an option to buy the Kansas City park for future expansion.
Company agrees to acquire Schlitterbahn Waterparks and Resorts in New Braunfels, Texas, and Galveston, Texas, along with the right to acquire an additional property in Kansas City, Kansas, for future development Advances strategy to leverage the Company’s management expertise, increase presence...
Schlitterbahn has had some hard economic and legal times, following the death of a 10-year old on their "airtime" waterslide in Kansas City two-years ago. At this point, Schlitterbahn will operate three remaining properties (Kansas City, South Padre Island, and Corpus Christi), owning two of those remaining properties (Corpus Christi is owned by IBC Bank, following Schlitterbahn's Chapter 11 bankruptcy filing). Should Cedar Fair opt to buy the Kansas City property, this would significantly shift the dynamic of Schlitterbahn's footprint.SANDUSKY, Ohio--(BUSINESS WIRE)-- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today announced that it has signed a definitive agreement to acquire two iconic water parks and one resort in Texas – Schlitterbahn Waterpark and Resort New Braunfels and Schlitterbahn Waterpark Galveston for a cash purchase price of $261 million, subject to certain working capital adjustments related to the timing of the closing. Additionally, Cedar Fair has the right to acquire a property located in Kansas City, Kansas, for a cash purchase price of $6 million.
“We are very excited about the opportunity to bring these two award-winning Texas water parks into the Cedar Fair family,” said Richard Zimmerman, Cedar Fair’s president and CEO. “These properties represent new markets for us with attractive demographics in the growing Central Texas region, and they align with our strategy to identify compelling opportunities to accelerate our growth and profitability. The investments we have made over the past five years to strengthen our back-of-house and customer-facing systems will support a smooth integration of these properties by ensuring a premium guest experience, strong team collaboration and superior execution.”
Zimmerman continued, “Schlitterbahn employees are known throughout the industry for their innovation and dedication to the quality of the guest experience. Because of their work, the water park located in New Braunfels has been recognized as the ‘Best Water Park in the World’ for 21 straight years, and Galveston has received recognition as the ‘Best Indoor Water Park in the World’ for a decade. We look forward to adding these parks to Cedar Fair’s industry-leading portfolio of regional entertainment resorts.”
In 2018, Cedar Fair entertained 25.9 million guests, reported $1.35 billion in annual net revenues and generated Adjusted EBITDA1 of $468 million (35% Adjusted EBITDA margin1). The two Texas water parks and the resort entertained 1.2 million guests in 2018 and generated annual revenues of approximately $68 million. Cedar Fair expects the two Texas locations to achieve an Adjusted EBITDA margin in line with Cedar Fair’s standalone results as management implements a number of growth and operational initiatives at the parks over the next two years, reflecting an accretive EBITDA multiple post synergies. Following this transaction, Cedar Fair’s portfolio will consist of 15 parks, resort accommodations totaling more than 2,000 rooms across six parks, more than 600 luxury RV sites across four parks, and two marinas.
In addition to the two Texas properties, Cedar Fair has the right to acquire a third site, located on approximately 40 acres in Kansas City, Kansas, which previously operated as a Schlitterbahn water park, for a cash purchase price of $6 million.
The transaction is subject to regulatory approval and other customary terms and conditions, and is expected to close during the second quarter of 2019 subject to those approvals and conditions. The Company intends to finance the transaction through additional long-term borrowings.
Perella Weinberg Partners is serving as financial advisor to Cedar Fair, and Squire Patton Boggs is providing legal counsel.