SHAKOPEE, Minn. — Cedar Honest, the corporate that at present owns Valleyfair in Shakopee, 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, value 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 would 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 income however have struggled to lift attendance for the reason that pandemic, whilst different leisure sectors have bounced again. A tie-up between two large gamers is anticipated to at the very least decrease prices.
Cedar Honest reported an attendance of 12.4 million friends in its third quarter, a 1% improve from a yr 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, mentioned James Hardiman at Citi Funding Analysis.
“Whereas the theme park business as a complete has been beneath vital strain for the reason that begin of the pandemic, Six Flags has created further strain of its personal, with a unstable new attendance and pricing technique that has struggled to take root, alienating its core prospects and resulting in dramatic drops in visitation alongside the way in which,” 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, but it surely was turned down. SeaWorld approached Cedar Honest with a bid final yr, however that proposal was additionally rejected.
Underneath the settlement introduced Thursday, Cedar Honest unitholders will obtain one share of widespread 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 carry collectively two of North America’s iconic amusement park firms to ascertain a extremely diversified footprint and a extra sturdy working mannequin to boost park choices and efficiency,” Cedar Honest CEO Richard Zimmerman mentioned in a ready assertion.
Zimmerman will probably be president and CEO of the mixed firm. Selim Bassoul, president and CEO of Six Flags, will change into govt chairman.
The businesses mentioned that given their broader geographic footprint as a single firm, seasonal volatility ought to average.
The corporate’s newly shaped board will embrace six administrators from Cedar Honest and 6 administrators from Six Flags.
The corporate will probably be headquartered in Charlotte, North Carolina, and can hold vital finance and administrative operations in Sandusky, Ohio, the place Cedar Honest relies.
Six Flags is now based mostly in Arlington, Texas.
As soon as the deal closes, the mixed firm will function beneath the title Six Flags and commerce beneath the ticker image “FUN” on the New York Inventory Trade.
The transaction, which was authorised by each firms’ boards, is focused to shut within the first half of subsequent yr. 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.