January 16, 2007
New York -- Six Flags announced plans to sell three of its water parks and four of its theme parks for $312 million.
The company announced last Thursday that it has entered into an agreement to sell the parks to PARC 7F- Operations Corporation (PARC) of Jacksonville, FL. The seven parks included in the sale are Six Flags Darien Lake in Buffalo, NY; Six Flags Elitch Gardens in Denver, CO; Frontier City and the White Water Bay water park in Oklahoma City, OK; SplashTown in Houston, TX; Waterworld USA in Concord, CA; and Wild Waves and Enchanted Village in Seattle, WA.
The seven parks will continue to operate under their new ownership. Six Flags estimated that the seven parks generated approximately $30 million in earnings (EBITDA) and approximately 3.6 million in attendance in 2006.
Excluded from the sale were Six Flags Magic Mountain and Six Flags Hurricane Harbor in Valencia, CA. Six Flags had previously announced its intent to sell these parks, but will continue to operate them for the foreseeable future.
"We're pleased with the sale price for this portfolio of parks, particularly since we were able to retain the Magic Mountain parks," said Mark Shapiro, Six Flags President and CEO. "This transaction confirms the value inherent in our major market branded parks."
The sale of these seven parks is a key component of Six Flags strategy to reduce debt and enhance operation and financial flexibility. Management planned to reduce the company debt by several hundred million dollars over the next several years.
This sale combined with the $77 million Six Flags received for the June 2006 sale of the land from the former AstroWorld theme park in Houston, will result in gross cash proceeds of $352 million for debt reduction.
"My new management team had several key priorities for Six Flags in 2006: transitioning our brand to attract families; cleaning up the parks; reducing capital expenditures; establishing a Corporate Alliances department to forge sponsorship and marketing partnerships with major consumer brands; increasing guest spending; and selling assets as a means to reduce the company's debt," said Shapiro.
"With this announcement, all those steps are in full swing and we now have our agenda focused squarely on the 2007 season," Shapiro added.
As part of the arrangements for the acquisition, PARC will simultaneously sell the parks to CNL Income Properties Inc., a Florida-based real estate investment trust, and lease back the parks from CNL pursuant to long-term leases.
The sale is subject to satisfaction of customary closing conditions, including clearance under the Hart-Scott-Rodino Act and receipt of necessary third-party consents. The transaction is expected to be completed in March 2007.
The company noted that both Six Flags Darien Lake and Six Flags Elitch Gardens will stop using the Six Flags name for 2007. Also, season passes purchased at either of these parks will be honored at all Six Flags branded parks throughout the 2007 season.
For more information, visit sixflags.com.
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