Merlin’s leisure portfolio is diverse and global, and includes the iconic London Eye attraction on the South Bank
Park in Germany. After a failed attempt to list on the London Stock Exchange, the business was acquired for £800m ($1.3bn, €970m) by Sheikh Mohammed al-Maktoum, the crown prince of Dubai, through his Dubai Investment Capital (DIC) vehicle in 2005.
The big consolidation Blackstone and the Merlin team decided to bring the two businesses together (rather than refinance Merlin) and in 2007 bought The Tussauds Group for £1bn ($1.6bn, €1.2bn), creating the sec- ond largest player after Disney in the global attractions industry. Following the acquisition, the company entered into a sale and leaseback with Prestbury Investment Holdings, selling the free- holds of Madame Tussauds London, Thorpe Park, Alton Towers and Warwick Castle to raise £622m ($1bn, €754m). Whilst Blackstone held the majority of the equity, both the family fund behind Lego (Kirkbi A/S) and DIC owned sig- nificant minorities, while a wide group of senior management also held shares.
Who made the money? While the list of investors is long (Apax, Blackstone, CDC, CVC, DIC, F&C/ Graphite, HPE, Kirkbi A/S, Pearson plc) this is only a list of the investment vehi- cles. Of these, two represent private
AM 1 2014 ©cybertrek 2014
LOOKING TO THE FUTURE Merlin’s future projects and plans include:
■ ■ Midway rollout of brands such as Madame Tussauds, LEGOLAND Discovery Centre, SEA LIFE, the Dungeons, Shrek’s Far Far Away Adventure and Eye attractions into suitable locations across Europe, USA, Far East/Asia and
beyond, including creating clusters of attractions in key locations ■■ Transforming existing theme parks into destinations, with the inclusion of accommodation and second gate attractions
money – DIC investing for the crown prince of Dubai and Kirkbi for the found- ing family of Lego. HPE is the odd one out, as at the time it was owned by the BT pension fund, so a lot of the benefits will go back to those with a BT pension. It’s worth noting that at the time of the floatation, Blackstone/ CVC and Kirkbi retained significant interests in Merlin. The other five private equity firms
(Apax, Blackstone, CDC, CVC, F&C/ Graphite) all raise funds from a wide variety of sources. For example, the current fund being invested by CVC raised 46 per cent of its money in the US, 17 per cent in Europe and 16 per cent in the UK, with the balance coming from Asia, the Middle East and Canada. So Merlin’s success has been supported by capital from all over the world.
■ ■ Development of new LEGOLAND theme parks (Dubai is currently under development) ■■ Strategic acquisitions that complement existing portfolio – with emphasis on North America, Europe and Asia/Pacific
This is one of the benefits of increas- ingly efficient global financial markets, far removed from the highly structured investing that contributed to the global financial crisis. Some of the infrastruc- ture evolved contemporaneously with Merlin’s increasingly rapid expansion. For much of this journey the manage-
ment team has remained the same – a remarkable achievement considering the scale of change and the range of share- holders they’ve had over the years. l
Nigel Bland leads the travel and leisure corporate finance team at Deloitte, advising operators and suppliers in
the attractions industry on disposals, acquisitions and capital-raising. Email:
nbland@deloitte.co.uk
Read Attractions Management online
attractionsmanagement.com/digital 35
PHOTO: SHUTTERSTOCK/ALESSANDRO COLLE
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