18 Jun 2019
Cedar Fair acquires Schlitterbahn brand and two Texas waterparks
BY Andy Knaggs
Cedar Fair has announced the acquisition of waterpark operator Schlitterbahn, gaining two new Texas waterparks in the process.
Upping its waterpark portfolio to 15, the Schlitterbahn Waterpark and Resort New Braunfels and Schlitterbahn Waterpark Galveston represent a cash purchase of US$261m (€233.4m, £208.2m) for Cedar Fair. As part of the deal, the company also has an option to acquire a third site in Kansas City, which previously operated as a Schlitterbahn waterpark. This site would cost US$6m (€5.36m, £4.79m).
"These properties represent new markets for us, with attractive demographics in the growing Central Texas region, and they align with our strategy to identify compelling opportunities to accelerate our growth and profitability," said Richard Zimmerman, Cedar Fair's president and CEO.
"The investments we've made over the past five years to strengthen our back-of-house and customer-facing systems will support a smooth integration of these properties by ensuring a premium guest experience, strong team collaboration and superior execution."
In 2018, the two Texas waterparks and New Braunfels resort received 1.2 million guests and generated annual revenues of approximately US$68m (€60.79m, £54.26m) – numbers that can be added to Cedar Fair's 25.9 million guests and US$1.35bn (€1.21bn, £1.08bn) in reported annual net revenues. The company's Adjusted EBITDA margin was 35 per cent, and it said it expected the Texas waterparks to perform in line with this.
The Henry family, which founded the Schlitterbahn enterprise in 1979, said its remaining South Padre waterpark would remain under family ownership and be eventually be rebranded. The Corpus Christi waterpark that Schlitterbahn still operates for Diamond Beach will remain as such.
"Under Cedar Fair's leadership, the Schlitterbahn brand will have an opportunity to grow and expand like the early days when the sky was the limit," said the Henry family's statement. "While it's a difficult decision, after several challenging years, we believe that our team, communities, guests and fans are going to enjoy what lies ahead."
Criminal charges including murder were recently dropped against Schlitterbahn following the death of 10-year-old Caleb Schwab in 2016 on the record-breaking 17-storey Verrückt waterslide. The ride has since been demolished. The incident occurred at Schlitterbahn's Kansas waterpark.
The transaction remains subject to regulatory approval and other terms and conditions, which Cedar Fair expects to be completed this year. It said it will finance the transaction through additional long-term borrowing.
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