Cedar Honest and Six Flags are merging to create an expansive amusement park operator with operations unfold throughout 17 U.S. states and three international locations.
The mixed firm, price greater than $3.5 billion, will boast 27 amusement parks, 15 water parks and 9 resort properties within the U.S., Canada, and Mexico. It should even have leisure partnerships and a portfolio of mental property together with Looney Tunes, DC Comics and Peanuts.
Amusement parks have seen an uptick in revenue however have struggled to boost attendance because the pandemic, at the same time as different leisure sectors have bounced again. A tie-up between two large gamers is anticipated to a minimum of decrease prices.
Cedar Honest reported an attendance of 12.4 million friends in its third quarter, a 1% enhance from a 12 months earlier. Six Flags introduced a 16% rise in its third-quarter attendance, which totaled 9.3 million friends.
However amusement parks, together with Six Flags, has struggled to get individuals by the gates, stated James Hardiman at Citi Funding Analysis.
“Whereas the theme park trade as a complete has been underneath important stress because the begin of the pandemic, Six Flags has created extra stress of its personal, with a risky new attendance and pricing technique that has struggled to take root, alienating its core prospects and resulting in dramatic drops in visitation alongside the best way,” Hardiman wrote.
Six Flags and Cedar Honest, which have little geographical overlap, anticipate $120 million in price financial savings inside two years of closing the deal.
Six Flags and Cedar Honest have talked about potential offers earlier than, with Six Flags beforehand making a suggestion for Cedar Honest in 2019, nevertheless it was turned down. SeaWorld approached Cedar Honest with a bid final 12 months, however that proposal was additionally rejected.
Underneath the settlement introduced Thursday, Cedar Honest unitholders will obtain one share of frequent inventory within the mixed firm for every unit owned, whereas Six Flags shareholders will obtain 0.5800 shares of inventory within the mixed firm for every share owned.
Cedar Honest unitholders will personal roughly 51.2% of the mixed firm, whereas Six Flags shareholders will personal about 48.8%.
“Our merger with Six Flags will deliver collectively two of North America’s iconic amusement park corporations to ascertain a extremely diversified footprint and a extra strong working mannequin to boost park choices and efficiency,” Cedar Honest CEO Richard Zimmerman stated in a ready assertion.
Zimmerman might be president and CEO of the mixed firm. Selim Bassoul, president and CEO of Six Flags, will change into government chairman.
The businesses stated that given their broader geographic footprint as a single firm, seasonal volatility ought to reasonable.
The corporate’s newly fashioned board will embody six administrators from Cedar Honest and 6 administrators from Six Flags.
The corporate might be headquartered in Charlotte, North Carolina, and can maintain important finance and administrative operations in Sandusky, Ohio, the place Cedar Honest is predicated.
Six Flags is now primarily based in Arlington, Texas.
As soon as the deal closes, the mixed firm will function underneath the title Six Flags and commerce underneath the ticker image “FUN” on the New York Inventory Change.
The transaction, which was authorized by each corporations’ boards, is focused to shut within the first half of subsequent 12 months. It nonetheless wants approval from Six Flags shareholders.
Shares of Six Flags Leisure Corp. and Cedar Honest LP have been basically flat earlier than the opening bell Thursday, however each are up greater than 9% this week after rumors of a deal started to unfold.
