May 22, 2006
Sandusky, OH -- Cedar Fair, L.P. announced today that it will buy Paramount Parks, Inc., a subsidiary of CBS Corporation for $1.24 billion in cash. The five Paramount Parks will join Cedar Fair's portfolio of seven amusement parks and five water parks.
The deal also has Cedar Fair taking over Paramount's management contracts for Bonfante Gardens in Gillroy, CA and Star Trek: The Experience in Las Vegas.
"This transaction offers a unique opportunity for us to acquire a world-class asset portfolio," said Dick Kinzel, Cedar Fair's chairman, president and chief executive officer. "It is not every day that we have the chance to purchase five great family-oriented parks that fit extremely well with our existing parks."
According to Cedar Fair, the acquisition of the five Paramount Parks will provide new growth opportunities. The parks will also provide the potential for meaningful cash flow as we realize $20-$30 million in annual cash flow synergies over the next three to five years.
"There is very little overlap between these five new properties and the existing parks," added Kinzel.
This acquisition should improve Cedar Fair's position as one of the largest regional amusement park operators in the world. It may also up the level of competition for its largest competitor Six Flags.
During a conference call Kinzel said that the license to feature the Nickelodeon cartoon characters such as SpongeBob SquarePants will continue. The license deal with Nickelodeon lasts for four more years and may be extended to include Cedar Fair's parks.
The license for use of the Paramount brands is still being discussed, so the future of the Paramount branded rides and attractions is unknown.
In 2005, Paramount Parks generated revenues of approximately $423 million while entertaining 12.2 million guests. Cedar Fair reported $569 million in revenues and 12.7 million guest visits. On a combined basis, the two companies generated almost $1 billion in revenues and entertained approximately 25 million guests in 2005.
In January, CBS announced that it would sell its theme parks division. The deal is subject to regulatory approval and is expected to close in the third quarter.
Cedar Fair was advised by Bear, Stearns & Co. Inc. and Rothschild, Inc., and Bear Stearns is providing $2.0 billion in committed financing in support of the transaction. Squire, Sanders & Dempsey provided legal counsel to Cedar Fair.
Cedar Fair's seven amusement parks are Cedar Point (Sandusky, OH), Knott's Berry Farm (Buena Park, CA), Dorney Park & Wildwater Kingdom (Allentown, PA), Valleyfair (Minneapolis), Worlds of Fun (Kansas City), Geauga Lake & Wildwater Kingdom (Cleveland) and Michigan's Adventure (Muskegon, MI). Cedar Fair's water parks are three Knott's Soak City parks in Palm Springs, San Diego and Buena Park, CA adjacent to Knott's Berry Farm, and water parks adjacent to Cedar Point and Worlds of Fun.
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