Apollo Global Management Buys Cedar Fair for $2.4 Billion, $635 Million in Cash
In a move that I didn’t see coming, Cedar Fair was purchased today by equity firm Apollo Global Management for $635 million in cash. Other reports (like this article from The Street) say the deal is for $2.4 billion in total. It’s reminiscent of Blackstone’s purchase of Busch Gardens a few months ago.
Cedar Fair operates 11 amusement parks in the United States including:
Cedar Point in Sandusky, Ohio
Kings Island near Cincinnati.
California’s Great America in Santa Clara, Calif.
Canada’s Wonderland near Toronto.
Kings Dominion near Richmond, Va.
Carowinds in Charlotte, N.C.
Worlds of Fun in Kansas City, Mo.
Valleyfair near Minneapolis.
Knott’s Berry Farm in Buena Park, Calif.
Dorney Park & Wildwater Kingdom in Allentown, Pa.
Michigan’s Adventure in Muskegon, Mich.
Typically, you think of company’s getting bought when they’re in trouble, but that’s not always the case. I don’t follow the business end of the theme park industry that closely, but I only recall a few signs of any trouble at Cedar Fair. There was news of Minnesota-based amusement park Valleyfair! possibly being for sale last spring and rumors that California’s Great America might be sold. This New York Times article states that profits were down slightly in 2009 (with more operating days), attendance was down, and those who visited spent less. While none of this is good news, in the current economy I don’t think it’s cause alone for an acquisition. Again, I don’t follow the business side of the industry as much so maybe I was out of the loop on this one. Cedar Fair shares rose 23 percent today after news of the sale to Apollo Global Management. Here’s a statement from Cedar Fair’s CEO Dick Kinzel:
“We have considered a wide range of strategic alternatives over the past several years. After considering these strategic alternatives, we have concluded that the transaction with Apollo is in the best interest of our unit holders,” said Cedar Fair Chairman and CEO Dick Kinzel, in a statement. –TheStreet.com
If the acquisition is anything like Blackstone’s purchase of Busch, guests shouldn’t expect to see many changes during their visits next year. I assume and I hope that an equity firm like Apollo would recognize Cedar Fair’s long running track record as a successful amusement park operator for many years and not meddle in their management of their well-run parks.
What’s Your Take?
What do you think of Cedar Fair’s acquisition? Has anyone heard anything about park operations? Leave a comment below.