Six Flags purchases Sea World of Ohio for $110 million

Posted Wednesday, January 10, 2001 2:43 PM | Contributed by Jeff

In a move that has the Cleveland area buzzing, Six Flags, Inc., today announced the purchase of Sea World of Ohio, located adjacent to its own Six Flags Ohio. The announcement comes only a week after the park announced the construction of a Vekoma Flying Dutchman called X-Flight.

Read more about the details of the sale from PR Newswire.

Related parks

Wednesday, January 10, 2001 8:58 PM
Pete's avatar I'm not happy with this news at all. I thought Sea World Ohio was a wonderful park and really added to the diversity of things to do in the area. It was clean, served excellent food, had entertaining shows, was beautifully landscaped, and was just a great place for a family outing. Six Flags will totally destroy the character of Sea World. Although I only went to Sea World about once a summer, I always had a great time and it became a summertime tradition. I'm missing it already.
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Wednesday, January 10, 2001 9:02 PM
You mean I'm not the only one who thinks so?!

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Villain-Once You Drop, The Fun Don't Stop!

SFO Rules In 2001

X Marks The Spot In 2001(SFO)

A.K.A.-BKF Master *** This post was edited by B&M-TYCOON on 1/11/2001. ***
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Wednesday, January 10, 2001 9:26 PM
Even though I've never been to SWO, I really wish that this hadn't happened but let's face the obvious here, SFO WOULD have put SWO out of business within five years due to all that SF has poured into the park. And with it being SO close to SFO you had to see it eventually coming.

For goodness sakes I'm in Tennessee and I could see this coming as soon as SF announced that they had purchased Gauga Lake.

Now let's look on the good side of things.

1. Desperately needed expansion of SFO
2. Hopefully the quality shows of SWO will be retained by SFO.
3. coasters, Coasters, COASTERS! Need I say more.

Come on people it doesn't matter what Theme Park company you owe your affections too, this IS good! No?


-------------CoasterTal

Flying over metal is a beautiful thing!
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Wednesday, January 10, 2001 9:48 PM
coastertal
i really don't think that sfo would of put swo out of buisness.if anything it would boost there attendance,because of the amount of people flocking to the area.i am disappointed to see sea world go,we have gone there the last 5 or 6 years except for this last year due to a death in the family.i wonder what is going to happen to shamu and the rest of the animals there.
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Wednesday, January 10, 2001 10:01 PM
For the facts, Sea World of Ohio was on a long term lease of the property. There were questions on what would happen to the lease after SF came to town. If this a true deal.

Second, I hope the resident population does not suffer the same fate as some rides at SF parks. Neglect. They need utmost attention and cannot have deferred maintenence.

SW Ohio was the least profitable of the AB parks, yet I thought it was a beautiful place. First in the 80's to have family season passes. Plenty of memories for me. Lots of energy from the staff and mammals who were on a seasonal schedule.

Sf is working off of their cash flow, they cannot borrow large credit lines at this point. They are refinanced for about 3 more years. When they owe on all of the principal, it will be "loo-loo".

Not to be negative, as my park is not perfect(we try), I just hope the usual trash, graffiti, and other urban problems do not blight a beautiful midwestern park.

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Thursday, January 11, 2001 12:58 AM
Awesome! The only other park with that type of entertainment in SFMW. SFO is really on it's way to becoming a mega-park, and very soon.

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SFNE will have all the fun you can STAND in 2001!
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Thursday, January 11, 2001 12:59 AM
john peck's avatar Since Six Flags is in charge, I wonder if Sea World this year will get fined for a near-drowning of a whale!
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Thursday, January 11, 2001 1:31 AM
I don't understand why Six Flags keeps buying parks because they don't do anyting to any of the smaller parks they own. SFKK for example, since SF has bought that park, have we seen many changes?? No, not really. 10 yrs and no Chances! Here SFO, gets 5 coasters within 2 years. SFO is a great park, don't get me wrong but they need to Share the wealth with their other parks. It is crazy!!! I know SFO is trying to compete with CP but they also have competion with PKI and SFKK would be good competion with PKI. SF needs to keep their up all their parks before the buy other parks.
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Thursday, January 11, 2001 2:31 AM
ShiveringTim's avatar This one has me baffled. One of the lead news items this morning here in Cleveland is that Shamu is leaving. What will TPFKASWO be without it's major attraction? Since Busch still holds the Sea World name, as well as Shamu, how can Six Flags market their newest acquistion and still be successful with it? I can see a huge drop in attendance until the two parks are physically united into one. Heck, I wouldn't be surprised if all the stadiums are leveled and SFO uses this land for more park development. Bottom line: I wouldn't be the least bit surprised if we see SFO being marketed as a 'resort' in the future.

BTW, I'll be attending ACE's annual No Coaster Con in Chicago where a SFO representative is scheduled to speak. I'll have a full report either here or on my site.

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Scott W. Short
scott@midwestcoastercentral.com
http://www.midwestcoastercentral.com
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Thursday, January 11, 2001 3:12 AM
This has been eating at me all evening since I had heard about it and while I am still not 100% sure of how I feel, I'll try to live up to the high standards established here at Coasterbuzz.
As an amusement park fan first and foremost and having no particular favoritism towards any single park, I do think this is a bad move. Six Flags poor operating standards were shown throughout the 2000 season with an undersized staff and bigger crowds. On one of my visits to Ohio this year, I stopped at th epark with my family for Fright Fest and the place was just jammed, yet they had one train operating on the Villain and two on Batman Knight Flight. Heck, they even closed BKF early. Six Flags was also recently fined for various infractions that occurred over the summer and now they plan to take over a major marine life park. I can only imagine what Six Flags will do to the park formerly known as Sea World. Will children fall into the holding tanks and nearly drown? Will an employee fall off the Happy Harbor net climb? All I ask is that Six Flags show some professionalism when they make this "mega-destination". When one goes to a Disney property for a vacation, they are treated like a king. Guest service is exceptional and the park goes out of its way to create a feeling that will be long -remembered. Six Flags Ohio creates a feeling of hostility towards guests. The employees were not very friendly at all and as I mentioned before, I shouldn't have to wait in line for 75 minutes to ride a coaster that should be using 2 trains on a busy Saturday night. Why would I want to make a repeat visit to a park where I am not treated as a guest?
I guess the move will create a wealth of exciting new attractions and additions in the coming years and I guess I should be enthused. But for some reason, i just have a very bad feeling about all of this. My family used to love the Shamu shows. Now they are nothing but a memory. I agree with one of the posters abovbe saying they are wiping away all of the park's history and I for one already miss the "small park" feel of Geauga Lake and am sure to miss the friendliness and hospitality of the folks at Sea World.

Sincerely,
Jackie Gaughan
Owner of The Plaza

http://www.jackiegaughan.com
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Thursday, January 11, 2001 4:42 AM
Let me guess... Six Flags Marine World, Ohio?

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Oh my freekin' head!
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Thursday, January 11, 2001 5:04 AM
PKS: off .25 with volume of 99,300. This is very high for the opening bell and not exactly a seal of approval by the stock market. They've already out traded all of the airline and internet stock and the price is down, not up.
Ten Minutes later down a half with volume of 180K
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Oh my freekin' head! *** This post was edited by Skyboss on 1/11/2001. ***
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Thursday, January 11, 2001 6:02 AM
slithernoggin's avatar I appreciate what some people are saying when they talk about Six Flags continued expansion being a good thing, since it results in more and more coasters for us. Maybe I'm too cautious; but I'd rather have a Six Flags in healthy financial condition, still around in ten years building coasters, than a Six Flags that borrowed more than it should and spent more than it should, and ended up in bankruptcy with parks closed.

Back in the 80s, a company from Canada went on a buying spree, buying up departent stores across the country, creating the largest department store company in the world. These purchases were financed with borrowed money. Thing was, the company got so big, the debt load so heavy, that the company couldn't make it's payments and went under. Some of the stores are still around, but many of them closed. Of course, department stores aren't amusement parks, but I'm concerned that a debt-heavy Six Flags could find itself in a similar position. Many of the larger parks might remain open or be bought by Paramount or Cedar Fair, but smaller parks (Kentucky Kingdom...Elitch's...) might be closed down.
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Thursday, January 11, 2001 6:21 AM
Here's some more information I pulled from the Goldman-Sachs newswire (I work in a brokerage, but I'm not a broker)...it answers some questions and provides some info not covered yet, and straightens out some speculation:

Six Flags; Another Strategic Off-Season Acquisition
Goldman, Sachs & Co. Investment Research

NOTE 7:09 AM January 11, 2001 ====================

25 Six Flags Inc. {PKS} $18.56
* Six Flags announced yesterday that it entered into an agreement to purchase Sea World of Ohio for $110 mm in cash. This will be partially financed through an issue of $175 mm in convertible preferred stock, which the company announced concurrently. Over the last month, PKS has acquired three parks for an aggregate price of about $140 mm. Based on PKS's current multiple and our target multiple, these deals appear modestly accretive from a valuation standpoint. Pending the closing of the deals, we will adjust our estimates accordingly. We continue to rate PKS a market outperformer.
* SEA WORLD OHIO. Sea World Ohio is a 232 acre marine wildlife park, which operates adjacent to Six Flags Ohio. Six Flags agreed to acquire the park for $110 mm in cash from Anheuser-Busch. Management stated that they intend to drive attendance and capture significant revenue synergies through joint marketing and ticketing of the two parks. We would also expect significant cost efficiencies through running the two parks as one asset. Management indicated that the park will retain the Sea World brand for the upcoming season, but carry the Six Flags brand thereafter. PKS also owns a hotel and campground on the property, as well as the lake which separates the two parks. Management's goal is to ultimately create a regional destination theme park. We expect the deal to close by the second week in February.
* THREE ACQUISITIONS. Management stated that in 2000 the three parks had aggregate attendance of 2.9 mm, revenues of $79 mm, and EBITDA of about $17 mm. Although the company did not break financials out by individual park, we estimate that the Seattle park, Le Ronde, and Sea World had 2000 attendance of 500k, 1.1 mm, and 1.4 mm, revenues of $10 mm, $15-20 mm, and $45-50 mm, and EBITDA of about $3.7 mm, $3.2 mm, and about $10 mm, respectively. Going into 2001, we believe the three parks will generate about $20 mm in EBITDA.
* VALUATION. Based on our current estimates, PKS is selling at 8.2x and 7.1x 2001 and 2002 EBITDA, respectively. Beginning in 2001, PKS should begin to generate significant free cash flow. However, we believe the stock price momentum will be governed by the tone of the operating season, which is several months away.



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Thursday, January 11, 2001 6:22 AM
PKS is down, but Prudential has upgraded the stock from Accumulate to Strong Buy.

(http://biz.yahoo.com/c/20010111/u.html?pks)


Not that I take the word of analysts as gospel ;)

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--Greg

http://www.pobox.com/~gregleg/
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Thursday, January 11, 2001 6:29 AM
Hey Jackie, your casino is awsome. Bring back that Ice Show!
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Thursday, January 11, 2001 7:14 AM
First...Jeff is absolutely right. We even talked about Six Flags in my accounting class today because of their high debt and low liquidity in assets. If they get into a pinch they're going to be in a lot of trouble. They are not doing a very good job answering to their stockholders.

Second...why does the expansion itself have to be a bad thing? Hasn't anyone ever been to Sea World Florida? I like the mix of rides and animals.
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Thursday, January 11, 2001 7:44 AM
And judging by BGT's attendance figures, this is perhaps a brilliant move by the company. People simply love animal/thrillride combo parks.

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Life's too short! Let's go ride some coasters! *** This post was edited by Simcoaster on 1/11/2001. ***
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Thursday, January 11, 2001 8:01 AM
Thanks Agent Johnson. The ice show you are referring to, while successful, had run its course and it was time to move forward with something else. We are currently running a female impersonator show and a Houdini-themed illusion show, along with our nightly lounge entertainment featuring the highly-regarded Sunspots.
Could you imagine our ice show at Six Flags? Not exactly family-oriented material, eh?
Hope to see you at one of our properties sometime soon.

Sincerely,
Jackie gaughan
Owner of The Plaza

http://www.jackiegaughan.com
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Thursday, January 11, 2001 8:07 AM
I'm stunned!!!!!!!
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