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INVESTMENT


Companies must work as hard as ever this year to maintain or grow their market share in a highly developed market place


assets to acquire around the globe and, of course, for signifi cant amounts of follow-on investment in existing sites. This investment goes on a wide range of areas, including new rides and experiences and improvements to secondary spend areas (from hotels to arcades) and infrastructure. The number of suppliers is huge.


SUPPLY CHAIN CONSOLIDATION Anyone new to the sector and visiting IAAPA for the fi rst time would be overwhelmed by the sheer number of suppliers to the sector – 625 companies have already registered to exhibit at the 2011 show in Florida, US. Many of these suppliers are incredibly specialist, often exploiting a single niche product or expertise but with a geographically diverse potential client base. With huge capital budg- ets now being spent by the major corporates [Merlin’s capex alone in 2010 was more than £100m (US$164.9m, €112.8m)], there is logic for some consolidation in the supply chain. The new chief executive of Lo-Q, Tom


Burnet, certainly thinks so. Following a strategic review of the business in February this year, he reported: “We see great potential to leverage our overhead, global footprint, operational expertise and relationships by targeted acquisition of other technically led organisations working in the theme, amuse- ment and water park sectors.”


3 Attractions Handbook 2011-2012 6


Over 625 companies have registered to exhibit at IAAPA 2011 Historically there's not been many trans-


actions in this space but there has been increasing interest both from private eq- uity and also from public companies. Indeed, some companies have been growing through this route for a while, such as Best Union, which has been making acquisitions for three years. The company recently acquired Amit for €1.2m (US$1.8m, £1.1m) in July 2010 (a business that manages electronic tickets for theatres, art, music and entertainment programmes) and in early April bought Te- leart, which operates in a similar area. These transactions follow on from the acquisition of Omni Ticket in 2009. Antenna Audio also changed hands (again), being sold by Discovery Communications to private equity fi rm Wicks Group. Wicks hope to “leverage Antenna’s expertise and market position to expand into adjacent and untapped markets with an expanded suite of products and serv- ices”. It’s not yet clear whether they intend to do that organically or acquisitively. In the distribution sector Maven Capital Partners led the £6.9m (US$11.4m, €7.8m)


MBO of Attraction World Ltd, a Birmingham- based provider of tickets for global tourist attractions, and proposes to invest capital so the business can expand into other markets.


CONCLUSION Everyone is hoping that while the global re- covery will almost certainly be slow there will be some growth this year and that the public will continue to spend at least at 2010 levels in the attractions sector. Companies are going to have to work as hard as ever to maintain or grow their market share in what is a highly developed and well-supplied marketplace. They will look to invest in their product and to generate the maximum impact from mar- keting in an increasingly complicated social network environment. Some will also look to drive profi ts through consolidation in either the operator space or the supply chain. I hope so, otherwise I will have nothing to write about next year! Nigel Bland is with the Deloitte corporate


fi nance leisure team. Tel: +44 (0)207 007 2761 Email: nbland@deloitte.co.uk


www.attractionshandbook.com


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