Buyer backs out on California's Great America, Cedar Fair will keep the amusement park

Posted Tuesday, December 6, 2011 3:49 PM | Contributed by Jeff

[Ed. note: The following is an excerpt of a press release. -J]

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment announced today that JMA Ventures, LLC (“JMA”) has elected to not move forward with their purchase of California’s Great America amusement park in Santa Clara, California. As a result of JMA’s actions, the definitive purchase agreement governing this transaction, originally agreed on September 16, 2011, has been terminated.

“We respect JMA’s decision and are pleased to return to the long-term ownership of this exceptional property,” said Matt Ouimet, Cedar Fair’s president. “As we stated at the time the agreement was made, this is a quality park that has terrific employees and serves a strong market. We look forward to continuing to take advantage of the synergies which are uniquely available to us as a result of operating this park as part of our larger portfolio of properties.”

According to Ouimet, the termination of this sale does not alter the Company’s expectations of achieving record adjusted EBITDA between $365 million and $375 million in 2011. “In fact, we expect to be at the higher end of our original distribution guidance of $1.35 to $1.65 per limited partner unit in 2012,” he said. “With continued growth in our annual distribution rates and additional debt reduction through our improved operating performance, we believe Cedar Fair will maintain its position as one of the most attractive growth and yield stories in the leisure and hospitality industry.”

The Company also announced that it has reached a long-term agreement with the San Francisco 49ers related to the construction of the stadium and parking for NFL and other stadium-related events for the life of the new stadium. The agreement is still subject to the execution of a definitive agreement and the approval of the Stadium Authority and related approvals from the City of Santa Clara.

“The combination of an NFL stadium and a premier amusement park in one location offers tremendous and exciting opportunities for family entertainment. We are excited to reach an agreement on construction issues and parking that are important to the stadium project,” said Jed York, president and chief executive officer of the San Francisco 49ers. “This arrangement leads the way to a mutually beneficial relationship between Cedar Fair, the 49ers and the City of Santa Clara,” added Ouimet.

“California’s Great America was a strong performer in 2011 and we are confident this will continue into the future as we build the park’s customer base through new marketing initiatives and capital investments.”

Read the entire press release from Cedar Fair.

Tuesday, December 6, 2011 4:48 PM
Jason Hammond's avatar

I never thought Cedar Fair and the 49ers would ever reach an agreement about the parking situation. I'm very curious to see what the outcome was and whether this will help patch the relationship with the city and allow Cedar Fair to more easily invest in the park again. It would be nice to see that Woodie come in that never happened before.


843 Coasters, 34 States, 7 Countries
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Tuesday, December 6, 2011 6:08 PM
john peck's avatar

“We respect JMA’s decision and are pleased to return to the long-term ownership of this exceptional property,” I wonder if he's really serious about this, or if they are just empty words. I still believe Cedar Fair will try to dump the park again.

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Tuesday, December 6, 2011 6:34 PM

Aaaaaannnnnnnnd...what does this mean now for Gilroy Gardens, the nicer of the two Cedar Fair-operated parks in the area? Apparently that management contract was to be a part of the JMA deal.

--Dave Althoff, Jr.


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Tuesday, December 6, 2011 7:00 PM
rollergator's avatar

"Exceptional" property. Giggle... :)

CF would still do pretty much anything to get out of this property. The reserve price is low, no reasonable offer refused.

Still laughing about their announcement of the new wooden coaster a couple years back. As IF... ;)

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Tuesday, December 6, 2011 7:22 PM
mlnem4s's avatar

I laugh at the usual "dump Great America" comments. The truth is the park has had improved performance and there is going to be a new leader in charge who is going to think outside of the box and leverage every available opportunity with the property. I don't think Great America is going anywhere.

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Tuesday, December 6, 2011 7:27 PM
Rick_UK's avatar

^ You are aware they just tried to sell it? You are aware that people in the Paramount chain claim they didn't want to buy it in the first place?


Nothing to see here. Move along.

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Tuesday, December 6, 2011 7:44 PM

RideMan said:
Aaaaaannnnnnnnd...what does this mean now for Gilroy Gardens, the nicer of the two Cedar Fair-operated parks in the area? Apparently that management contract was to be a part of the JMA deal.

I had the same thought. Whatever happens I hope the park can just do its thing without any "improvements" from Cedar Fair in terms of rides and their usual offerings. Gilroy Gardens is the polar opposite of what has become the standard Cedar Fair style.


"Thank the Phoneticians!"

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Tuesday, December 6, 2011 8:45 PM

Rick_UK said:
^ You are aware they just tried to sell it? You are aware that people in the Paramount chain claim they didn't want to buy it in the first place?

Not to mention, the new owners just backed out. I do hope things will turn around though. It's still a potentially strong park once you begin to strip away all the damage done to it by Paramount.

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Tuesday, December 6, 2011 9:19 PM
mlnem4s's avatar

Rick_UK said:
^ You are aware they just tried to sell it? You are aware that people in the Paramount chain claim they didn't want to buy it in the first place?

Um, I was a full-time manager at Paramount so I do know a little something about these things....namely that the posts on the internet in regards to this park are full of hyperbole. Does it have its own unique challenges, yes. Is it a total flop, no. Are there opportunities there that Ouimet can seize on, yes. Ultimately can it be profitable, yes...as it has proved recently.

The Great America story isn't as cut and dry as everyone likes to make it.

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Tuesday, December 6, 2011 11:31 PM
Jeff's avatar

Hyperbole? I don't think so. The park was well known to be the dog of the chain, to the extent that Cedar Fair allegedly would have preferred not to have bought it with the rest. PP didn't invest in it heavily because they desperately wanted to unload it. That it suddenly has a couple of solid quarters doesn't make it a winner. If it was, I suspect the buyer would have followed through.

My guess is, on due diligence, JMA saw something they didn't like.


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

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Tuesday, December 6, 2011 11:43 PM
CoasterDemon's avatar

Damn, see what happens when you remove 2 Anton coasters from your park ;)


Billy
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Wednesday, December 7, 2011 1:24 AM

I know I wouldn't buy a used car in which the previous owner hadn't put any effort into in several years. Can you say booby prize? Ironically, Now CF is stuck with the park and must invest in it to make a profit. Something they should have been doing in the first place. Thank God for the changing of the guard.

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Wednesday, December 7, 2011 6:03 AM

TimChat2 said:



Gilroy Gardens is the polar opposite of what has become the standard Cedar Fair style.

Way too many trees to chop down and no historical park buildings being removed? :)

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Wednesday, December 7, 2011 8:12 AM
Jason Hammond's avatar

John Knotts said:
I know I wouldn't buy a used car in which the previous owner hadn't put any effort into in several years.

With the battle between the 49ers, the city wasn't very happy and wasn't making it easy for them to do much of anything that had to be permitted or get zoning approval. That's why the woodie meant for CGA ended up becoming Prowler. Hopefully now that the battle seems to be over the city may actually let them do something now.

Last edited by Jason Hammond, Wednesday, December 7, 2011 8:13 AM

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

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Wednesday, December 7, 2011 11:27 AM

"We respect JMA’s decision and are pleased to return to the long-term ownership of this exceptional property,” said Matt Ouimet, Cedar Fair’s president. “As we stated at the time the agreement was made, this is a quality park that has terrific employees and serves a strong market. We look forward to continuing to take advantage of the synergies which are uniquely available to us as a result of operating this park as part of our larger portfolio of properties.”

I think Ouimet is speaking to both the market in general and to JMA. You don't want to say that we are kicking ourselves because we don't get to unload this dog of a park knowing that you may well be trying to get other folks to buy said dog. And you don't want to alienate JMA if there is a chance that they may reconsider. So play nice and be complimentary.

Last edited by GoBucks89, Wednesday, December 7, 2011 11:28 AM
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Wednesday, December 7, 2011 2:42 PM

SONiC Senshi said:

Way too many trees to chop down and no historical park buildings being removed? :)

With Gilroy Gardens they could chop down historical trees. It'd be a two-fer!


"Thank the Phoneticians!"

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Wednesday, December 7, 2011 10:07 PM
James Whitmore's avatar

Shortly after this sale was first announced, Standard & Poor's Ratings Services revised its rating outlook on Cedar Fair to "positive" from "stable. So now will they downgrade it?


jameswhitmore.net

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Thursday, December 8, 2011 10:38 PM
mlnem4s's avatar

I think all of you who continue to recite the usual internet negativity about CGA are in for a very big surprise. And Jeff your belief that some sort of "bad numbers" spoiled the potential new owner from going through with the purchase is factually false. It would be great for everyone to stop spreading false information about CGA; the park is doing exceptionally well under great new leadership and will continue to do so under this new agreement.

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Thursday, December 8, 2011 11:27 PM
Jeff's avatar

Factually false? That's hilarious. I can believe and guess whatever I want, thanks. You don't walk away from buying property unless the inspection reveals something suboptimal. That's what they call a "deal breaker," in the literal sense.

I'm well aware that the company called out the park as doing well in their last earnings report. Since the SEC doesn't care for lying about that kind of thing, I'll take their word for it. Doesn't mean that the park hasn't experienced years and years of suck.


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

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