FINANCE
In 2009, Cedar Fair saw net revenues decline to $916.1m (£602m, 684.1m) from $996.2m (£654.5m) 774m) in 2008, a fall of 8.7
per cent. Adjusted EBITDA fell by 15.7 per cent to $299.9m (£197m, 224m) from $355.9m (£234m, 266m) in 2008. In December 2009, Cedar Fair entered into a defi nitive merger
agreement with Apollo Global Management. The deal consisted of Apollo paying $635m (£417.5m, 474m) for Cedar Fair’s assets, as well as paying off the $1.7bn (£1.1bn, 1.3bn) of debt making the deal worth $2.4bn (£1.6bn, 1.8bn). The offer represented a 43 per cent premium over Cedar Fair’s volume-weighted average closing unit price over the 30 days prior to the deal announcement. Bank funding totalling $1.95bn (£1.3bn, 1.5bn) had been committed in support of the transaction through a syndicate of six banks. However, on 7 April, the takeover was terminated as a result of
insuffi cient investor support. Cedar Fair is to pay Apollo $6.5m (£4.3m, 4.9m) for expenses incurred while the deal was under discussion. The agreement reportedly required two thirds of shareholder majority support to pass, and several signifi cant stake- holders baulked at the price Apollo was offering.
THE FUTURE
So what does 2010 hold for the sector? Having weathered the storm well in 2009, many operators are likely to continue to focus predominately on existing operations and cash generation. This year will see the UK, US and European economies continue to slowly recover from the recession and consumer confi dence should start to increase. Unemployment levels, however, will remain high and the British pound is likely to remain weak. As in 2009, continual product development will remain a priority
for operators in order to maximise visits and encourage visitors to return. This year is already showing signs of increased lev- els of transactional activity and investment in new parks. Merlin Entertainments acquired Cypress Gardens and Splash Island Waterpark in Florida in January 2010 for an undisclosed amount.
US companies with high levels of debt, such as Cedar Fair and Six Flags suffered badly during last year’s recession
2010 WILL SEE ECONOMIES CONTINUE TO SLOWLY RECOVER FROM THE RECESSION AND CONSUMER CONFIDENCE SHOULD START TO INCREASE. UNEMPLOYMENT LEVELS, HOWEVER, WILL REMAIN HIGH
(Cypress Gardens was another US casualty of the recession and closed in September 2009.) Merlin has also been signed up by Blackpool Council to manage the redevelopment of Blackpool Tower. Merlin’s fl oat remains a very big option though it was post- poned early in the year due to uncertainty in the market. At the end of March 2010, Futuroscope’s main shareholder announced it was looking for new investors, with Compagnie des Alpes reportedly interested in acquiring a 40 per cent stake. In the US, the futures of both Six Flags and Cedar Fair are likely
to be determined shortly. While Cedar Fair had seen a decline in performance in 2009, it’s still a highly profi table company. With the correct debt structure, the company trading should recover. If Six Flags is able to exit Chapter 11 with a more manageable debt struc- ture, it too should also be able to set itself on the road to recovery. Overall, 2010 is already showing signs of being a strong year for
If Six Flags can exit Chapter 11 and organise a more manageable debt structure, it could be on the road to recovery, say the experts
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theme park, waterpark and attractions operators. ●
Nigel Bland, associate partner and Liz Smith, assistant director Deloitte LLP
Read Attractions Management online
attractionsmanagement.com/digital
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AM 2 2010 ©cybertrek 2010
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