Wall Street Journal says Cedar Fair bought by private equity firm Apollo Management

Posted Wednesday, December 16, 2009 6:13 PM | Contributed by tambo

The Wall Street Journal is reporting that Apollo Management LP is expected to acquire Cedar Fair for about $700 million, with an announcement due in a few days.

Read more from The Sandusky Register.

Wednesday, December 16, 2009 6:18 PM

A few comments on previous thread here.

If this means the guy at the top goes, and my friends' jobs remain, I'm 100% for it. That after-hours training has been good to the unit price is OK as well.

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Wednesday, December 16, 2009 6:25 PM

Who is apollo?

Never heard of them. Are they in the theme park buisness?

Nevermind. Found this.

http://en.wikipedia.org/wiki/Apollo_Management

Last edited by crazy horse, Wednesday, December 16, 2009 6:29 PM
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Wednesday, December 16, 2009 6:27 PM

No--they are in the buying-companies-with-depressed-stock-prices-and-iffy-balance-sheets business. :)

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Wednesday, December 16, 2009 6:32 PM

Not really, they just have a very broad portfolio that includes some amusement/hospitality related industries. They own Norwegian Cruise Lines, AMC, another cruise line, and I believe they have a majority stake in (if not owning outright) Harrah's Entertainment.

From what I understand, they are similar to Blackstone in that they take a very hands-off approach. However, perhaps a little hands-on might be needed when it comes to certain positions/things. Personally, though, I think it is more likely that Kinzel (and others) would preemptively retire if things were going that route.

Last edited by maXairMike, Wednesday, December 16, 2009 6:33 PM
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Wednesday, December 16, 2009 6:42 PM

This really does make logical sense...that Cedar Fair would be an attractive takeover target for a company like Apollo, I mean.

1. The company is profitable
2. The company is successful
3. The company is undervalued
4. The company has a difficult short-term debt load
5. The company has a manageable level of long-term debt

In other words, as I see it anyway, Cedar Fair is a reasonably strong company that, because of purely financial issues, is undervalued and has some short term debt issues. A private equity company can take care of the short term debt, and over the longer term see a massive return on investment without having to fix a badly broken company to do it. I'm guessing the biggest stumbling block is putting together a deal that the master partners will accept.

--Dave Althoff, Jr., who is speculating out of his league here...

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Wednesday, December 16, 2009 6:52 PM

So would the name "cedar fair" go bye bye?

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Wednesday, December 16, 2009 6:54 PM

I doubt Dick's ego could take answering to anyone else. He's gotta go.

I just hope the actual offering is higher than $700 million. That only works out to $12.something, and I sure would like to see something more.

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Wednesday, December 16, 2009 6:57 PM

Some further food for thought in the matter is something that Apollo did with/for NCL. The Norwegian Epic (NCL's largest ship) was bankrolled entirely by Apollo, and NCL has also been trending upward. It just posted its first profitable quarter (last quarter) in four years.

So while Apollo may be "new" to the amusement park side of things, they definitely have plenty of experience (holdings) in the larger hospitality and entertainment industry. I think this bodes well, and if there's financing beyond the Paramount debt coming to Cedar Fair, I would look at major changes in Sandusky for the resorts.

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Wednesday, December 16, 2009 8:48 PM

Wow, this is enormous news. Wonder how it will all shake out over the long run....

Who would have guessed that within a few months of each other, Six Flags would go bankrupt, Universal would be sold to a cable company, and Cedar Fair would get purchased by an investment firm?

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Wednesday, December 16, 2009 9:49 PM

I would not worry to much (however, I an not familiar with this companies tack over practices). However, I have experienced this before.

My company was purchased by Goldman Sackes and Providence around four years ago as a joint venture. The upper mgmt changed immediately on this accusation for us. For those that wish to see Dick kicked out the next day that is not profitable for him will probably be disappointed... They get a nice check for outstanding shares and most likely a nice fat buyout for existing contracts. Anyone who thinks Dick is going to be at the gates crying this spring should just let that thought go....

My company has now been rolled back in Nasdaq over the past two months. We were able to have a large firm give us more capital to expand while directly avoiding stock holders, SOX and other direct regulations that public comapnies are now required to do. We would have never have grown by being independently public. We are now three times the size and public again. I do not dismiss for a minute that the some of the original mgmt is still involved with public stocks.

Like I said though, this was my experience with my company and could be different here. Time will tell...

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Wednesday, December 16, 2009 9:58 PM

Oh please bring the flash pass :)

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Wednesday, December 16, 2009 10:04 PM

Jeff said:
I doubt Dick's ego could take answering to anyone else. He's gotta go.

I just hope the actual offering is higher than $700 million. That only works out to $12.something, and I sure would like to see something more.

This story by PR Newswire says that the offer will be $11.50 per unit. That's actually less than the price of $11.65 the units hit in after hours trading. Kwiatkowski is trying to sugar coat it by saying that price is a high premium over the recent trading price of 9 bucks. But what about the folks who bought units when the price was in the 20-30 dollar range?

http://www.prnewswire.com/news-releases/cedar-fair-agrees-to-be-acq...63292.html

I am curious, though, to see what Apollo's take on the whole Great America/ 49ers issue will be and how that might play out with some more muscle behind the park.



Last edited by RatherGoodBear, Wednesday, December 16, 2009 10:07 PM
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Wednesday, December 16, 2009 10:10 PM

Well, sure, but that's what leveraged buyouts are---the purchaser is getting a good deal. The hope is that the pre-purchase valuation is lower than it "ought to be" for one reason or another, so they can offer more than the current valuation, but less than the long-term value of the company.

It looks like a pretty decent bet to me.

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Wednesday, December 16, 2009 10:49 PM

Meh... I don't know how inclined I'll be to vote for $11.50. I'm just not convinced that the potential to refinance in a couple of years is that grim, and that soft attendance and spending is a long-term problem, even with the old man at the helm.

That said, being a private company I think would be a huge plus for the way they operate, especially if someone else who doesn't micromanage from Kinzel Kastle is in charge. The pressure to grow and pay distribution has always been counter to what I'd otherwise consider a relatively sustainable business.

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Wednesday, December 16, 2009 10:52 PM

maXairMike said:
and if there's financing beyond the Paramount debt coming to Cedar Fair, I would look at major changes in Sandusky for the resorts.

I'm thinking the same thing, the resorts may actually be able to hit their full potential. Probably some much needed after hours adult oriented entertainment will be headed CP's way also.

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Thursday, December 17, 2009 3:24 AM

With all the problems that Harrah's is having, I'm surprise that Apollo could pull off. I must say though, it would nice if Apollo could get a casino in Sandusky. My company could use the money.

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Thursday, December 17, 2009 6:28 AM

I just hope they FINALLY give Breakers an overhaul.

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Thursday, December 17, 2009 11:42 AM

There will never be a casino in Sandusky unless the morons in Ohio who voted for that asinine constitutional amendment vote for something to repeal it.

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Thursday, December 17, 2009 8:33 PM

No need for a casino in Sandusky. Just put one in Toronto and run a cruise ship from Ohio with all the gambling/cruise crowd. Cross market it with NCL maybe.

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