Blackstone acquires Busch Entertainment for as much as $2.7 billion

Posted Wednesday, October 7, 2009 12:16 PM | Contributed by Jeff

After months of negotiations, Anheuser-Busch InBev announced this morning that it will sell Busch Entertainment Corp. to the Blackstone Group for as much as $2.7 billion. Blackstone, the New York-based private-equity giant, will pay AB InBev $2.3 billion in cash plus give the beer brewer a right to participate in its return on investment up to $400 million.

Read more from The Orlando Sentinel.

Wednesday, October 7, 2009 1:18 PM
Jason Hammond's avatar

I knew about the Universal tie-in. I didn't know about the Legoland tie-in. It will be very interesting to see the overall impact on the relationship between all the parks.

<edit to add>

I was already planing on going to Sea World San Diego, Universal Hollywood, Legoland California, and Busch Williamsburg next year. If there ends up being some kind of Mega Pass for all of them it would defiantly be worth getting.

Last edited by Jason Hammond, Wednesday, October 7, 2009 1:22 PM

843 Coasters, 34 States, 7 Countries
http://www.rollercoasterfreak.com My YouTube

+0
Wednesday, October 7, 2009 1:18 PM

well, there you have it.

No mention of third parties, or anything unusual. Maybe those shoes drop later.

Interesting about the $400Million in upside potential. Would love to know what that's based on.

+0
Wednesday, October 7, 2009 2:23 PM
janfrederick's avatar

They probably threw that in so that they could offer it at a lower price.


"I go out at 3 o' clock for a quart of milk and come home to my son treating his body like an amusement park!" - Estelle Costanza
+0
Wednesday, October 7, 2009 2:48 PM
Jeff's avatar

Jason Hammond said:
I was already planing on going to Sea World San Diego, Universal Hollywood, Legoland California, and Busch Williamsburg next year. If there ends up being some kind of Mega Pass for all of them it would defiantly be worth getting.

If they're treating it like and independent business, I don't think there's much chance for that beyond what they already do in Central Florida.


Jeff - Webmaster/Editor - CoasterBuzz.com - My Blog - Twitter - Video

+0
Wednesday, October 7, 2009 3:20 PM

I wonder how this will affect any capital improvements/new rides at Busch Gardens for next year.

Last edited by Phareous, Wednesday, October 7, 2009 3:20 PM
+0
Wednesday, October 7, 2009 5:04 PM
ridemcoaster's avatar

The most important part of this is.. The Parks will run themselves under BEC, which though the years pre IB, they have done quite well. Its been a rough year with IB scrutinizing every little detail, now they can go back to doing what they do best.

The sad part is some of the comments from the Brewery folks. The best one I got was "its like watching a ship sail away, with everyone partying on it".

Just glad to be on the ship.


+0
Wednesday, October 7, 2009 5:43 PM

^ Ride, I guess that ship would be a "Brew's Cruise," right? :)


Coaster Junkie from NH
I drive in & out of Boston, so I ride coasters to relax!

+0
Wednesday, October 7, 2009 5:52 PM
ridemcoaster's avatar

Nah, they took our free beer away last year.. Jerks.. But we took away their free passes so there.. :)


+0
Wednesday, October 7, 2009 6:14 PM

ridemcoaster said:
The most important part of this is.. The Parks will run themselves under BEC, which though the years pre IB, they have done quite well. Its been a rough year with IB scrutinizing every little detail, now they can go back to doing what they do best.

Well, it may sound better in a "devil you don't know is probably better than the devil you do" (InBev). And I would certainly agree, as of now.

However, Private Equity firms exists for a single reason, and that is to make EXCEPTIONAL returns, greater than what "normal" businesses make. They do it by eventually screwing everyone they can (banks, trade, employees, etc), all for the benefit of their equity funding partners.

Now, I'm not saying that's bad, and as a die hard capitalist, I embrace the idea of making profits. However, don't think that this is a deep pocketed sugar daddy who just loves some whale flesh and some coaster pron. Nope, It's a very real set of investors, who have just spent $2.3 BILLION in CASH and expect to get good returns. Now, part of that is the idea that at some point they will flip it to someone else for big capital appreciation, but until then, they will be watching the bottom line. Perhaps not as ruthlessly as InBev treated them the last 15 months, since InBev knew they were selling them, but still expecting profits.

So, keep a wary eye on this situation until we know for sure how the parks are treated (re: Capital, management, employees, etc)

+0
Wednesday, October 7, 2009 7:58 PM

Private equity firms increase their returns, like most businesses, through leverage/debt. How can you do that if you screw banks? Linked article indicates that $1.3 billion of the acquisition price will be financed (from what I understand with a mix of senior bank debt and mezzanine lenders), $1 billion in equity and $400 million in essentially a seller note (transaction is less leveraged than you would typically have seen say 2 years ago but it just isn't very easy in the current market (if not impossible) to do deals at the historic leverage levels). You don't get $1.3 billion in financing if you have a reputation of screwing banks. You also typically do not maximize your return by screwing trade creditors/vendors/suppliers and employees.

+0
Wednesday, October 7, 2009 8:13 PM
ridemcoaster's avatar

Credit.. If you truly knew the financial crap that a brewery business who has no knowledge of park running yet wanted to meddle and change everything for the worst.. You would see my comment.

AB did it right.. They let them run themselves and gave them a lot of rope, to which BEC was successful with. IB did a complete 180. They really had no clue.

Believe me there was a great sigh of relief in the park today for it couldnt get too much worse.. And looking at the track record of Blackstone's stuff, specifically Merlin, I dont see it going that direction.

Indeed time will tell, but we knew off the bat IB was a big mistake for BEC. Least this time that sentiment isnt going around (least at BGW).


+0
Wednesday, October 7, 2009 9:10 PM
kpjb's avatar

So can I buy a Sam Adams Oktoberfest in the German section yet?


Hi

+0
Thursday, October 8, 2009 1:05 AM

ridemcoaster said:
Credit.. If you truly knew the financial crap that a brewery business who has no knowledge of park running yet wanted to meddle and change everything for the worst.. You would see my comment.

AB did it right.. They let them run themselves and gave them a lot of rope, to which BEC was successful with. IB did a complete 180. They really had no clue.

Believe me there was a great sigh of relief in the park today for it couldnt get too much worse.. And looking at the track record of Blackstone's stuff, specifically Merlin, I dont see it going that direction.

Indeed time will tell, but we knew off the bat IB was a big mistake for BEC. Least this time that sentiment isnt going around (least at BGW).


I think you misinterpreted what I said (or what I thought I said). I agree with you 100% that Blackstone will be better for Busch parks than InBev. In fact, if you go back to one of the original threads about InBev buying Busch, I clearly laid out how that would be horrendous for the parks. I dealt with InBev in 2000, and Mr. Brito is ruthless. There is nothing he cares about beyond extracting the next $0.01 per share, and he cares not a whit from where it comes..

My comment was supposed to be that, yes, it is no doubt better than the InBev option, but that it's still a private equity firm that will expect return for its money.

Last edited by CreditWh0re, Thursday, October 8, 2009 1:09 AM
+0
Thursday, October 8, 2009 1:33 AM
DantheCoasterman's avatar

Hopman said:
^ Ride, I guess that ship would be a "Brew's Cruise," right? :)

Tell me that this is a play-on-words of Blue's Clues...? (If not, I am going to feel very...childish. :))


-Daniel

+0
Thursday, October 8, 2009 6:37 AM

Yes and no. It's a play on the sterotypical "booze cruise" where people got oyt on a boat and get plastered.


Coaster Junkie from NH
I drive in & out of Boston, so I ride coasters to relax!

+0
Thursday, October 8, 2009 10:41 AM

I would not worry at all. Blackstone will do like they did when they purchased Tussaud and Merlin. Business as usual, except a different pocket is collecting the money.

They're investing top money in all their properties, even finding ways to do impossible things. The London Dungeon is run by them and they got the budget to install... a 30 feet tall indoor freefall into an existing attraction!

We can dream if John Wardley would design the next ride at a Busch park?

P.S: John Wardley is the engineer responsible for Alton Towers, Thorpe Park and Chessington highly themed rollercoasters.


+0
Thursday, October 8, 2009 12:25 PM

CreditWh0re said:
My comment was supposed to be that, yes, it is no doubt better than the InBev option, but that it's still a private equity firm that will expect return for its money.

So non-private equity investors don't expect a return on their money? Are they investing with no concern for returns? Do they even want their investment money back? Are they making gifts?

+0
Thursday, October 8, 2009 1:34 PM

1) Was this the worst-kept secret in the history of amusement park acquisitions, or what?

2) If we look at the track record of Blackstone and Merlin in the amusement industry, I think we have reason to believe that their philosophy...probably because this particular private equity has been at this game a long time...appears to be well beyond the traditional F-&-F. Their history is one of building top-tier, highly successful amusement businesses. They are not afraid to spend big money, and so long as the venture is profitable they seem to be patient about letting the investment pay itself back. Their strategy is more "buy, build, and hold" than "flip and ****". It's about building success, not flipping properties.

The good news: This is one more company that is no longer a slave to the quarterly report. The annual report maybe, but not the quarterlies.

--Dave Althoff, Jr.


    /X\        _      *** Respect rides. They do not respect you. ***
/XXX\ /X\ /X\_ _ /X\__ _ _ _____
/XXXXX\ /XXX\ /XXXX\_ /X\ /XXXXX\ /X\ /X\ /XXXXX
_/XXXXXXX\__/XXXXX\/XXXXXXXX\_/XXX\_/XXXXXXX\__/XXX\_/XXX\_/\_/XXXXXX

+0
Thursday, October 8, 2009 7:57 PM
ridemcoaster's avatar

Agreed RideMan, which is why I used Merlin as an example. Busch has been very successful through the years and with people keeping their nose out of the silly day to day stuff and backing all their endeavors, or even most of them (something AB pre IB was very notorious for), there is little concern they wont continue to succeed and do Blackstone proud.

One thing of interest I can say.. You will see the name Worlds of Discovery pushed more often than BEC.

Also if you are curious how the money is coming about this is a good read:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMrwFvCC7Gb0

Last edited by ridemcoaster, Thursday, October 8, 2009 8:26 PM
+0

You must be logged in to post

POP Forums - ©2018, POP World Media, LLC
Loading...