Cedar Fair quietly seeks buyout
Posted
Cedar Fair Entertainment Co., the nation's third-largest theme-park operator, has quietly reached out to private equity firms to gauge their interest in a buyout on the condition that the company's management team remains in place, The Post has learned. According to two sources close to the situation, Cedar Fair has tapped Bear Stearns to conduct a small, highly targeted auction for the company.
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To put it in perspective, when they were buying the Paramount chain, they said that no one park would generate more than 22% of the company's revenue, which they estimated would be close to 1 billion dollars annually. That means that Cedar Point generates 220 million dollars each year. Divide that out by three million guests and you get about 73 bucks a person - nearly double the per capita average for the rest of the parks.
Cedar Point also sits on a BEAUTIFUL parcel of land. I believe that was his point.
A beautiful parcel of land that was ruined by building a large ugly amusement park on it.
Just bringing attention to the matter of perspective.
On an amusement park enthusiast board, obviously the opinions will be that a park sitting there is good and anything else is bad. If we were all into perserving nature, we'd be whining about how the natural beauty and setting have been ruined by the amusement park. If this were a condo developers forum we'd be slobbering over the opportunites that exist if the park sold out.
Perspective. :)
Gonch, I just hope you go onto the developers forum and play Devil's advocate there too, and tell them how important it is to preserve amusement parks and historic wooden coasters. :)
I asked my broker about the whole proposed buyout thing-- and while he was never totally keen on my owning CF units in the first place-- he did mention that a buyout doesn't necessarily mean getting rid of upper management. This is especially true in what's basically a specialized field. Not many people are experienced in running theme parks.
Sure, a PE firm could bring in MBA's or someone who was CEO somewhere else who could come up with ways to spend less money while bringing more in. But hasn't every sitcom ever aired on TV had an episode where the heartless bean counting efficiency expert comes in? The moral of the story always is, while the guy understands numbers, he has no clue about the "soul" of the business, which is just as important to its success.
Anyway, the question is, if a buyout would occur and the current management is given the heave-ho, who could possibly step in and effectively run a dozen theme parks, and make them more profitable without losing any of the fun?
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