INVESTMENT
NIGEL BLAND • PARTNER • DELOITTE LEISURE • M&A ADVISORY
Mergers & Acquisitions 2012 Nigel Bland explains why attractions remain interesting to investors, despite the economic backdrop I
t has been another year of dire headlines about the state of the European economy and the constriction of the supply of capital. Whilst the United States showed some signs of recovery, massive national and personal debts slowed growth in Europe and pushed the UK into a double-dip recession. Although Asia’s economies continued to expand, the growth rates were lower.
MAJOR OPERATOR GROWTH So, surely, theme parks and other visitor attractions should be struggling? Apparently not. The fi gures in Table 1 show that the top fi ve operators all achieved like-for-like growth between 2010 and 2011, as indeed they did last year. This refl ects a growth in both visits,
which were 1-2 per cent higher, and spend, which showed a 3-8 per cent rise. French theme park operator Grévin et Cie
found it slightly tougher, as did Spanish op- erator Aspro Ocio, in 2010 − possibly owing to a higher proportion of regional (rather than national) attractions. Even in Europe, where the economies were weakest, there was still growth for the major operators. Additionally, the major charging UK heritage and wildlife attractions (see Table 2) posted a strong growth in total visits after a more mixed performance in 2010. This surprisingly robust performance was replicated in other areas of the leisure economy, with many of the major operators of theatres, cinemas and restaurants achieving growth; albeit relatively modest in some cases.
TABLE 1: PERFORMANCE OF THE MAJOR OPERATORS Company
Sites Disney
(Dec 2011) 13
Merlin Entertainment 77 Parques Reunidos Six Flags Cedar Fair Aspro Ocio
Grévin et Cie
72 19 17 40 15
1 Like-for-like growth: 7.9 per cent. 2 4
19 10 3 2 8 3
However, the outlook is considered by many to be more challenging. Forecast growth rates for all the major European economies in 2012/13 have been cut significantly and there is considerable uncertainty around the future of the Euro. A number of leisure companies have reported a diffi cult Q1 and many analysts believe it will be harder to achieve like-for-like growth this year.
Countries Visits
2011 (m) 2010-11 120.0 47.3 26.2 24.3 23.4 9.02 7.5
10.0 18.11 8.2 3.8 5.2 n/a
(0.2) 2010. Source: annual accounts.
Revenue growth rates (%) 2009-10 1.0 4.1 2.6 9.0 6.6
(7.8) 3.6
DRIVING M&A Parques Reunidos made two acquisitions (see Table 3) earlier this year: Slagharen (one of the largest theme parks in the Neth- erlands) and Noah’s Ark (one of the largest waterparks in the USA). This business was acquired in 2007 and has therefore been held for a relatively long time by private equity standards. Given the scale of the business, a trade buyer is unlikely and the larger secondary PE deals are constrained by lack of debt. So, the most likely exit may be a fl otation. However, with new issues on public markets remaining few and far be- tween, it may be a while before Arle Capital Partners is able to exit.
The same may also apply to the owners of Merlin (CVC / Blackstone / KIRKBI), which pulled back from a fl otation in 2010 and are now looking at an exit in 2013/14. In the meantime they continue to build their
52 Attractions Handbook 2012–2013
www.attractionshandbook.com
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