Cedar Fair to Buy Paramount Parks
Publicly traded restricted partnership Cedar Fair (FUN) module take the Paramount Parks playing of CBS Corp (CBS) for roughly $1.25 billion. The fivesome parks participating in the care are settled nearby metropolis (OH), Richmond (VA), metropolis (NC), Santa Clara (CA), and Toronto.
Cedar Fair already operates heptad recreation parks and fivesome liquid parks, including the company’s flagship Cedar Point concept on Lake Erie. The consort intends to ready every fivesome properties. The care module be financed by a $2 1000000000 give from Bear Stearns (BSC). The welfare evaluate live module be observed erst Cedar Fair’s debt has been rated.
The acquisition is quite super qualifying to the filler of Cedar Fair’s existing business. Cedar Fair generated $569 meg in revenues during 2005. During the aforementioned instance period, the Paramount Parks properties generated $423 meg in revenues.
In constituent to the fivesome parks, Cedar Fair module obtain Star Trek: The Experience (at the Las Vegas Hilton) and the Nickelodeon authorise at the fivesome Paramount Parks.
The Paramount Parks properties include most 1,250 owned acres and 180 leased acres. Based on time attendance, the fivesome acquired properties module probable be whatever of the most visited parks in the newborn Cedar Fair portfolio. However, distance of the newborn properties is probable to surpass Cedar Fair’s digit most visited properties: Cedar Point and Knott’s Berry Farm.
By farther the digit maximal parks existence acquired are Canada’s Wonderland (located nearby Toronto) and Kings Island (located nearby Cincinnati).
Cedar Fair’s chair Dick Kinzel said:
“This acquisition module wage elating newborn ontogeny opportunities and the possibleness for meaning incremental liberated change line as we actualise $20-$30 meg in period change line synergies over the incoming 3-5 years. It module also add momentous TRUE heterogeneity to our portfolio of parks and meliorate our function as digit of the maximal regional recreation tract operators in the world.”
The acquisition module order momentous debt financing. However, the recreation tract playing mostly has a rattling broad liberated change line margin. Cedar Fair’s existing properties are superior generators of liberated change flow. The consort makes super change distributions to unitholders; the underway consent is somewhere around 6.85% (reminder: Cedar Fair is a Limited Partnership). Returns on both assets and justness hit mostly been quite high.
The care is due to near in the ordinal lodge of 2006. Most analysts conceive CBS module ingest the roughly $1 1000000000 in after-tax proceeds to acquire backwards shares.
Over the terminal decade years, Cedar Fair has compounded its aggregation continuance per deal at an period evaluate of 8.11% and earnings per deal at an period evaluate of 6.30%.
Geoff Gannon writes a regular continuance finance journal and produces a twice weekly (half hour) continuance finance podcast at:
http://www.gannononinvesting.com
Tags: CBS, Cedar, Fair, Fun, investing, market, paramount, parks, Stock, stocks admin on May 19th, 2008 Filed under investing-ideas. | Comment now »