Six Flags Announces Sale of Ohio and Europe Assets
March 10, 2004
Today Six Flags Incorporated said that it would sell its Cleveland theme park and its European division in separate deals that will raise $345 million to reduce Six Flags' massive debt load.
Six Flags (NYSE: PKS) agreed to sell Six Flags Worlds of Adventure, including the adjacent hotel and campground, to Cedar Fair LP for $145 million in cash. Six Flags will retain all of the animals at the park and relocate them to other Six Flags Parks. Cedar Fair (NYSE: FUN) owns a number of amusement parks, including the nearby Cedar Point in Sandusky, Ohio.
Six Flags purchased the Ohio park known as Geauga Lake in 1995 during their acquisition of Funtime Parks. The park was renamed Six Flags Ohio in 2000, but was changed to Six Flags Worlds of Adventure in 2001 when Six Flags purchased the adjacent SeaWorld park for $110 million. Cedar Fair plans on returning the Geauga Lake name to the park. Cedar Fair also intends to shut down the animal park and concentrate on the coasters and other rides.
Six Flags Worlds of Adventure is a family-oriented theme park situated on approximately 690 acres, including a 50-acre spring-fed lake. The park offers its guests a wide variety of rides and attractions, including 10 roller coasters, several childrenís areas, a water park, and various live shows, and entertains more than 1.5 million guests each year. Although 2003 was a soft year, over the past three years the park has averaged revenues of approximately $64 million and cash operating profit of approximately $16 million. Cedar Fairís revenues and cash operating profit for 2003 were $510 million and $176 million, respectively.
Six Flags also will sell its European parks, including theme parks in Belgium, France, Germany, and the Netherlands, to a private investment firm for $200 million. The deal excludes its interest in Warner Brothers Movie World theme park in Madrid.
Wall Street analysts estimates these deals will reduce Six Flags' debt by $290 million, reducing annual interest payments by about $26 million. However, this will not offset the drop in cash flow or earnings. Six Flags has a large amount of debt because of its rapid expansion in the late 1990s and early 2000s when it purchased a large number of theme parks.
Six Flags, with 39 theme parks worldwide before the sale, has had two straight years of attendance drops while its debt has grown to $2.3 billion. The deals announced Wednesday will allow it to pay down its debt and focus on its North American parks, PKS chairman Kieran Burke said.
Here is a list of the Six Flags European parks as of March 2004:
Here are the Cedar Fair parks as of January 2007:
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