Cedar Fair and Six Flags announce equal merger
Posted
From the press release:
SANDUSKY, Ohio & ARLINGTON, Texas--(BUSINESS WIRE)-- Cedar Fair (NYSE: FUN) and Six Flags Entertainment Corporation (NYSE: SIX) today announced that they have entered into a definitive merger agreement to combine in a merger of equals transaction. The combined company, with a pro forma enterprise value of approximately $8 billion based on both companies’ debt and equity values as of October 31, 2023, will be a leading amusement park operator in the highly competitive leisure space with an expanded and diversified footprint, a more robust operating model and a strong revenue and cash flow generation profile.
Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, Cedar Fair unitholders will receive one share of common stock in the new combined company for each unit owned, and Six Flags shareholders will receive 0.5800 (the “Six Flags Exchange Ratio”) shares of common stock in the new combined company for each share owned. Following the close of the transaction, Cedar Fair unitholders will own approximately 51.2%, and Six Flags shareholders will own approximately 48.8%, of the combined company’s fully diluted share capital on a pro forma basis. One business day prior to the close of the transaction, Six Flags will declare a special cash dividend composed of: (i) a fixed amount of $1.00 per outstanding Six Flags share, totaling approximately $85 million in the aggregate, plus, (ii) an amount per outstanding Six Flags share equal to (a) the aggregate per unit distributions declared or paid by Cedar Fair to unitholders with a record date following today’s date and prior to the close of the transaction, multiplied by (b) the Six Flags Exchange Ratio, which special dividend will be payable to Six Flags shareholders of record as of one business day prior to the close of the transaction, contingent on the closing of the transaction.
“Our merger with Six Flags will bring together two of North America’s iconic amusement park companies to establish a highly diversified footprint and a more robust operating model to enhance park offerings and performance,” said Richard Zimmerman, President and Chief Executive Officer of Cedar Fair. “Together, we will have an expanded and complementary portfolio of attractive assets and intellectual property to deliver engaging entertainment experiences for guests. The combination also creates an enhanced financial profile with strong cash flow generation to accelerate investments in our parks to delight our guests, driving increased levels of demand and in-park value and spending. I have great respect for the Six Flags team and look forward to joining forces as we embark on this next chapter together.”
“The combination of Six Flags and Cedar Fair will redefine our guests’ amusement park experience as we combine the best of both companies,” added Selim Bassoul, President and Chief Executive Officer of Six Flags. “Six Flags and Cedar Fair share a strong cultural alignment, operating philosophy, and steadfast commitment to providing consumers with thrilling experiences. By combining our operational models and technology platforms, we expect to accelerate our transformation activities and unlock new potential for our parks. We are excited to unite the Cedar Fair and Six Flags teams to capitalize on the tremendous growth opportunities and operational efficiencies of our combined platform for the benefit of our guests, shareholders, employees, and other stakeholders.”
Compelling Strategic and Financial Benefits
- A Successful Amusement Park Operator with Complementary Portfolio of Attractive Assets: The combined company will operate a portfolio of 27 amusement parks, 15 water parks and 9 resort properties across 17 states in the U.S., Canada, and Mexico. The company’s complementary portfolio will include some of the most iconic parks in North America with significant brand equity and loyal, recurring guest bases within the highly competitive leisure space. The combined company will also have entertainment partnerships and a portfolio of beloved IP such as Looney Tunes, DC Comics and PEANUTS to develop engaging new attractions enabled by compelling characters, environments, and storytelling.
- Diversified Footprint and Guest Experiences: Cedar Fair and Six Flags have minimal market overlap of park operations, and the combined company’s complementary geographic footprint is expected to mitigate the impact of seasonality and reduce earnings volatility through a more balanced presence in year-round operating climates. The portfolio will include diversified experiences for guests including safaris and animal experiences, campgrounds, sports facilities and luxury lounges, enabling the combined company to better meet rising consumer demand for varied and engaging entertainment options.
- Enhanced Operating Platform to Improve Guest Experiences: By uniting Cedar Fair and Six Flags’ complementary operating capabilities, the combined company will benefit from a more robust operating platform for improved park offerings and more efficient systemwide performance. The companies expect to leverage Cedar Fair’s recent park investment experience to accelerate the transformation underway across Six Flags’ portfolio. Cedar Fair and Six Flags will seek to create a more engaging and immersive guest experience. The combined company will also offer expanded park access to season pass holders along with an enhanced, combined loyalty program featuring additional perks.
- Experienced and Proven Leadership Team: The senior leadership teams of Six Flags and Cedar Fair bring different and complementary skillsets and experience to the combined company, including decades of park operating experience as well as significant expertise integrating businesses and achieving synergy targets.
- Significant Cost Savings and Revenue Uplift Opportunity: Following the close of the transaction, Cedar Fair and Six Flags expect the combined company will benefit from the significant value created by total anticipated annual synergies of $200 million. Approximately $120 million of these synergies are expected to be related to identified administrative and operational cost savings, which the companies anticipate realizing within two years following transaction close. The companies also expect to leverage their complementary operating capabilities to deliver additional revenue uplift, generating approximately $80 million of incremental EBITDA that the companies anticipate realizing within three years of transaction close.
- Strong Financial Profile: Over the last 12 months, through the third quarter of fiscal 2023, Six Flags and Cedar Fair collectively entertained 48 million guests, and, as a combined company, would generate pro forma $3.4 billion1 in revenue, $1.2 billion1 in Adjusted EBITDA2, and $826 million1,3 of free cash flow4, reflecting run rate cost savings of $120 million and revenue uplift resulting in $80 million of incremental EBITDA. The transaction is expected to be accretive to earnings per share for Cedar Fair unitholders and Six Flags shareholders within the first 12 months following transaction close. The combined company is also expected to have a pro forma leverage ratio of approximately 3.7x net debt to Adjusted EBITDA, inclusive of synergies, with a path to reduce the leverage ratio to approximately 3.0x within two years of transaction close.
- Significant Free Cash Flow Generation and Enhanced Financial Flexibility: The combined company’s increased free cash flow will provide it with greater flexibility to invest in new rides and attractions, broader food and beverage selections, additional in-park offerings, and cross-park initiatives, such as consumer technology and enhanced guest services. The combined company’s resources are expected to be strategically deployed to grow attendance, increase per capita spending, and improve profitability, all while enhancing guests’ value and experience across the park portfolio. The combined company is committed to allocating capital to maximize shareholder returns once the company achieves its targeted net leverage ratio.
Leadership, Corporate Governance and Headquarters
The combined company will be led by a proven management team that reflects the strengths and capabilities of both organizations. Upon closing of the transaction, Richard Zimmerman, President and Chief Executive Officer of Cedar Fair, will serve as President and Chief Executive Officer of the combined company and Selim Bassoul, President and Chief Executive Officer of Six Flags, will serve as Executive Chairman of the combined company’s Board of Directors. Brian Witherow, Chief Financial Officer of Cedar Fair, will serve as Chief Financial Officer of the combined company and Gary Mick, CFO of Six Flags, will serve as Chief Integration Officer of the combined company.
Following closing of the transaction, the newly formed Board of Directors of the combined company will consist of 12 directors, six from the Cedar Fair Board and six from the Six Flags Board.
Upon closing of the transaction, the combined company will operate under the name Six Flags and trade under the ticker symbol FUN on the NYSE and will be structured as a C Corporation. The combined company will be headquartered in Charlotte, North Carolina, and will maintain significant finance and administrative operations in Sandusky, Ohio.
Approvals and Closing
The merger is expected to close in the first half of 2024, following receipt of Six Flags shareholder approval, regulatory approvals, and satisfaction of customary closing conditions. Approval by Cedar Fair unitholders is not required. Six Flags’ largest shareholder, which owns approximately 13.6% of Six Flags’ shares outstanding, has signed a voting and support agreement to vote in favor of the transaction. The transaction is not expected to trigger any change of control provision under Cedar Fair’s and Six Flags’ respective outstanding Notes. The companies expect to refinance their respective revolving credit facilities, and Six Flags expects to refinance the Six Flags Term Loan, ahead of transaction close.
Cedar Fair and Six Flags Third Quarter 2023 Results
In separate press releases today, Cedar Fair and Six Flags reported results for the third quarter of fiscal year 2023. The Cedar Fair release is available at https://ir.cedarfair.com and the Six Flags release can be found at https://investors.sixflags.com.
Advisors
Perella Weinberg Partners is serving as exclusive financial advisor and Weil, Gotshal & Manges LLP and Squire Patton Boggs (US) LLP are serving as legal counsel to Cedar Fair. Goldman Sachs & Co. LLC is serving as exclusive financial advisor and Kirkland & Ellis LLP is serving as legal counsel to Six Flags.
Jeff:
That, and how do you think money "moves" between banks? Why don't we go back to riding horses, slavery, and a world without vaccines, while we're at it?
That escalated quickly.
13 Boomerang, 9 SLC, and 8 B-TR clones
They aren't even morally equivalent.
Electronic Money Transactions > RRR > Slavery
I don’t know what’s more annoying. Cancel culture or victim culture.
The Louis C.K. video you posted might be funny, and he might be right, but it's just a subject that makes me uncomfortable. Some comedians think it's their job to shock you and make you uncomfortable- to make you think hard about if what they are saying is helpful or hurtful. That's why I didn't plusone the comment. I'd rather think about the happier things in life, like roller coasters.
Some comedians just want to make people laugh. YMMV.
-Travis
www.youtube.com/TSVisits
Well, it wasn't the subject matter of the video that makes Louis CK off-limits.
He won a Grammy in 2022 and sold out Madison Square Garden in January. That doesn’t seem all that off-limits to me.
Meanwhile, Nate Bargatze is selling out arenas across the country without so much as a single vulgar word or provocative topic. He’s not home-spun corny, either. He somehow hit upon just the right formula and it seems he’s enjoyed by everyone.
And to be clear, I don’t insist that my source for comedy be squeaky clean, but I’m looking forward to Nate more than anyone else I’ve seen in a while.
LostKause:
Some comedians think it's their job to shock you and make you uncomfortable
I think they think it's their job to make you laugh.
Nate Bargatze is funny. Taylor Tomlison is funny. Louis C. K. is funny. Bob Saget's comedy is still funny. So is Jerry Seinfeld, and so is Richard Pryor's stuff. The list goes on and on.
These are not mutually exclusive.
While it's all subjective, I suppose I'm a bit of an omnivore when it comes to good stand up comedy. If I laughed, the comedian did a good job. If I didn't laugh and you did, the comedian needs to work harder because there is clearly something wrong with your sense of humor.
That said, Louis C.K.'s SNL monologue from 2015 is a masterclass in stand-up delivery. If it helps one feel less uncomfortable, he only talks about "mild" racism.
I didn't know there were many happier things in life than comedy to talk about.
Promoter of fog.
Well, amusement parks, for one...
The cashless thing would have gone over better with me had someone in the food stand been empowered to make an adjustment to a transaction. Since they couldn't just pull $3 out of the drawer and send me on my way, and they couldn't fix the transaction, they ended up sending me to another office where they comped my next meal. Nice, and I was made more than whole, but it wasn't the fix I really wanted. I will say that a certain Cedar Fair park (not Cedar Point) has a bit of a reputation for screwing up credit card sales (double charges and the like) and while they always seem to clean up the mess, it can leave people's debit cards in a messy state for days at a time. Don't know if it actually solves the problem, but I don't use credit or debit cards directly in such places...I use Apple Pay because it generates a unique "card number" for each transaction which should prevent the transaction aggregation stuff that seems to cause the charge errors. Or maybe they're using Accesso on the back end or something.
As for comedy, funny is funny, and if I find out that the funny man did some not-so-funny things, that doesn't really make his work any less funny, does it? I might not want to go to a new concert or buy a new album, but that doesn't make the old ones any worse...at some point you might have to recognize you're a fan of the work, even if maybe you can't stand the artist anymore. If Moxy Früvous were still touring, for example, I'd still go to their shows...but I'd definitely warn any of my lady friends to steer clear of Jian Ghomeshi*.
--Dave Althoff, Jr.
*Yes, he was acquitted of criminal wrongdoing, but it's still pretty clear that he was less than kind to his girlfriends...
/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
eightdotthree:
He won a Grammy in 2022 and sold out Madison Square Garden in January.
I literally had no idea.
I was more familiar with this path of his career where we're still making documentaries about his crap. I had no idea it was ok to like him again. I'm very happy. I saw him at one of Chappelle's corn field shows during covid and was ecstatic. Loved his HBO sitcom. Loved his FX show. Big fan of his stand-up. (Ohio Stater's clip is a wonderful example) At the time most people were like, "Ew."
I thought he was still off limits. I just sort of wrote him off professionally. Shame on me.
Turns out Nashville does a Comedy Festival in April where they have big comedians come through town at various venues for a week or so. Already have tickets for Shane Gillis and Tom Segura.
It's good to know I can buy Louis CK tickets if/when the opportunity arises and not be seen as supporting his jerking-off-on-the-phone antics.
Lord Gonchar:
I saw him at one of Chappelle's corn field shows
Super jealous of that experience.
True story;
I use a couple classic Bill Cosby bits (from the famous "Bill Cosby, Himself" show) in a certain class when talking about Freud (which is funny now on multiple levels). Anyway, in the same class I get random anonymous feedback/questions at the end of each week. After that particular class, one student simply wrote:
"I had no idea Bill Cosby was ever a comedian. I thought he was just a rapist. Still funny, though!"
Promoter of fog.
Tom Segura is hilarious. His wife is also a comedian, Christina Pazsitzki. I can only imagine that as a situation where they both come home from work exhausted and really grouchy.
eightdotthree:
Super jealous of that experience.
Yeah, that was pretty nifty. If I may indulge for a moment...
Dave Chappelle did comedy shows in what was essentially a cornfield in Nowhere, Ohio during 2020's initial covid summer. It started quietly and slowly, but soon word got out that he was bringing some pretty big names to town.
As an aside, "Town" is Yellow Springs, Ohio - It's where Chappelle lives and, conveniently for me, about 10 minutes from our front door at the time.
By the end of summer it was a pretty hot ticket mostly because they were limited capacity with social distancing...and literally at a park pavillion in the middle of cornfields next to a dairy farm. They were supposed to run into the first weekend of October - and as that got closer the speculation of who would show up for that final weekend was through the roof.
I thought it would just be cool to get there. So I started digging in. The pattern tended to be 3-day weekends (Thurs, Fri, Sat - could have been a Sunday 4-day too, not sure) with the Friday & Saturday tickets being hotter due to most of the surprise names coming in on Friday rather than mid-week. There were regular exceptions, but it was a general rule.
I can't remember exactly why I didn't wait to try for that final weekend - or maybe I planned to try to go again and would in the future - but, I went for tickets for the last weekend in September. So like the weekend or two before they were planning on wrapping up anyway.
I got shut out of the Friday & Saturday tickets pretty quick and I remember being pissed and reluctantly moving over to Thursday and grabbing those.
The thing with Thursdays is they could be hit or miss. From what I understand, every show only promised a small line up of Chappelle locals and friends nearby. (Dave Chappelle, Donnell Rawlings, Michelle Wolf - I think were the basic three and DJ Trauma was always there) So, worst case scenario is we get to see three great comedians in a corn field in Ohio during Covid when nothing was happening. Best case, a name might show up.
That night it was chillier than it had been and drizzily. It kept people away. I know that sounds weird, but no one was really traveling at the time (and certainly not leisure travel), so this was mostly a local phenomenon and there were people who'd go every weekend. So skipping a slow, cold Thursday show wasn't even a thing.
We were not those people.
We showed up enthusiasticly on September 24th.
I'm so glad we did.
I think the field was set up for a capcity of 400 at that time. They had pairs of chairs in side of circles marked on the ground (Covid was hilariously stupid then) and it was first come, first serve. You grabbed a circle, claimed it with your jackets and could then check out the food trucks or port-a-potty or hit the "smoking" area in the back corner near the woods. The place was only half full. Maybe 2/3rds.
Chappelle sort of hosts, coming out and doing bits between acts - you know, a comedy show.
Long story short. Who did we get to see in a corn field in Ohio that wet, cool, September night?
In order of appearance:
DJ Trauma
Dave Chappelle
Michelle Wolf
Chris Spencer
Mo Amer
Bob Saget
Chris Tucker
Louis CK
Donnell Rawlings
Cordae
Yeah. We were lucky enough to see Bob Saget, Louis CK, Chris Tucker and Dave Chappelle on one show...in a corn field...in rural Ohio...in the misty drizzle...with about 200 or 300 people in attendance.
What makes it even crazier is that the next day, and this is the rumor at least, someone involved with the whole thing - no idea if performer or crew or whoever it takes hanging around to do a show like this - tested positive for Covid and the whole thing shut down. With the whole two-week to clear thing back then and the show only having approval to run two more weekends, they just canned it.
We saw the final of the original Chappelle corn field shows that night on a Thursday with tickets I was pissed that I got stuck with. If I had gotten those Friday or Saturday seats, we'd have never seen it.
Michelle Wolf is hilarious, but wow do some people absolutely hate her. What a bummer about Bob Saget.
Jeff - Editor - CoasterBuzz.com - My Blog
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