Apollo agrees to acquire Great Wolf Lodge

Posted Tuesday, March 13, 2012 4:31 PM | Contributed by Drew2876

Investment manager Apollo Global Management said Tuesday that it agreed to acquire indoor water park operator Great Wolf Resorts for about $167.1 million. New York-based Apollo Global Management LLC will buy Great Wolf Resorts Inc. for $5 per share, which represents a 19 percent premium over the Madison, Wis.-based company's closing stock price on Monday.

Read more from WLWT/Cincinnati.

Tuesday, March 13, 2012 4:58 PM

Great! The stock price now is $5.32. Way to go Apollo.

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Tuesday, March 13, 2012 6:58 PM

I really wish I had a better understanding of big time finance so I can better grasp why all of these PE firms are slowly getting into the amusement business.

Palace Entertainment, Merlin, Sea World Parks & Entertainment and now Great Wolf are all owned by huge, global PE firms. And Cedar Fair was very close not so long ago!

It can’t be for the growth because the industry has been mature in North America for years.

The cash flow is solid, but only for part of the year and is subject to huge risks and seasonality (weather, liability etc.).

It can’t be for the expenses because in general, the operating costs are very high compared to other industries.

Finally the amusement industry is so capital intensive, I just don’t see why these PE firms are seeing it as an investment strategy. If I ever win the lottery, the last place I would invest is in the amusement industry...and it is where I earn my living!

Someone clue me in please….where am I missing something?

Last edited by Hanging n' Banging, Tuesday, March 13, 2012 6:59 PM
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Wednesday, March 14, 2012 3:20 AM

Congratulations, Andy!!! You'll let us stay free....right?

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Wednesday, March 14, 2012 8:11 AM

So, Apollo landed a Kinzel...just not the big fish. Interesting.

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Wednesday, March 14, 2012 8:19 AM

Private equity firms typically will invest wherever they think they can get a good return. Over the past 2-3 years, there haven't been a lot of private equity deals so there is a lot of money on the sidelines looking to get into the game. Over the past 18-24 months, there have not been a lot of good deals available. So there have been a lot of PE firms looking to buy those few good deals which drives the purchase price up. That drives returns down. As a result, some PE firms start looking at less crowded space in the market. If you can get a good deal on a company that doesn't have huge growth potential, you may be able to produce better returns in your investment window (typically 3-5 years) than you can with overpaying for a company with higher growth potential.

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Wednesday, March 14, 2012 9:26 AM

Will Q Funding try to stop this too? ;)

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Wednesday, March 14, 2012 1:02 PM

Mike Gallagher said:
Congratulations, Andy!!! You'll let us stay free....right?

What do you think this is? A charity?

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Wednesday, March 14, 2012 1:05 PM

I wonder if the deal had any "hidden" parachutes for the board.

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