Monday, December 21, 2009
Cedar Fair L.P. bought out by Apollo Global Management
In a major announcement today, Cedar Fair has released that they've agreed to be purchased by Apollo Global Management. The $2.4 billion agreement will see Apollo assume all of Cedar Fair's debt, which leaves about $635 million as the premium price of the company. Apollo is a very large investment company, generally similar to Blackstone which just purchased the Busch Entertainment parks.
Cedar Fair's board has already approved the sale, though it is contingent on obtaining a 2/3 vote of the company's unit holders. If all goes as planned, the sale could close at the start of the 2nd quarter 2010, leaving Cedar Fair as a private company wholly owned by an affiliate of Apollo Global.
What does this mean for the parks? Too early to say. Apollo does have investments in entertainment companies such as Harrah's and AMC Movie Theaters, though this would be their first with amusement parks.
There are many variables that still need to play out for me to feel comfortable having a strong opinion on this. As of now, Cedar Fair certainly was struggling under it's current management in many areas, but strong as ever in others. The Paramount purchase mess really did create a debt load that was too much to sustain in these times, so something had to give.
If the sale goes though it will be some time before we see how much of Cedar Fair's current corporate mentality soldiers on, and that's the most important factor to me. Really, it could be fantastic news... or awful - as much as I hate to say it only time will tell on that one.
The reason why I have posted this article is it hits home here for me (Reighard). Dorney Park & Wildwater Kingdom in Allentown, PA is owned by Cedar Fair L.P. company. Now, since Apollo bought Cedar Fair L.P. company the future of Dorney Park and the other 11 amusement parks owned by Cedar Fair L.P. is uncertain what will it bring under the new management of the new owners of the parks.
The video link provided talks about the future projects that is planned for 2010 season and the interview with Dick Kinzel CEO of Cedar Fair L.P. company.
First, if you have a lot of time and you want to know more about the purchase of Cedar Fair by Apollo, you can read their filings with the SEC - but it's a bazillion pages long so be warned.
On the flipside, the Sandusky Register has an article with a video up that's of a quite long conversation with Kinzel himself. Lots of items are covered, such as Kinzel staying at head of the company for a while still, headquarters staying in Sandusky, how the deal went down, and more. You can check out that video and article here.
This is my home park and seeing how it improved over the years, I'm quite uncertain what will Apollo do with the parks it now owns (including my home park: Dorney Park & Wildwater Kingdom).
Special thanks to NewsPlusNotes to provide more details of this buy out of Cedar Fair L.P. company and Apollo Global Management.