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Six Flags Agrees to Sell Seven Parks for $312 Million


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Press Release Source: Six Flags, Inc.

 

Six Flags Agrees to Sell Seven Parks for $312 Million

Thursday January 11, 8:40 am ET

 

Six Flags Magic Mountain and Hurricane Harbor in Valencia, CA Excluded from Sale

PARC 7F - Operations Corporation Will Purchase and Operate the Seven Parks; Financing Committed by CNL Income Properties Inc.

 

 

NEW YORK, Jan. 11 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX - News) announced today that it has entered into an agreement to sell three of its water parks and four of its theme parks to PARC 7F-Operations Corporation (PARC) of Jacksonville, FL for $312 million, consisting of $275 million in cash and a note receivable for $37 million. The seven parks are: Six Flags Darien Lake in Buffalo, NY; Six Flags Elitch Gardens in Denver, CO; Frontier City and the White Water Bay water park in Oklahoma City, OK; SplashTown in Houston, TX; Waterworld USA in Concord, CA; and Wild Waves and Enchanted Village in Seattle, WA. The seven parks are estimated to have generated approximately $30 million of Park EBITDA(1) and 3.6 million of attendance in 2006.

 

Six Flags Magic Mountain and the adjacent Hurricane Harbor water park in Valencia, CA are not included in this transaction and will be fully operational and open for business in 2007 and beyond.

 

"We're pleased with the sale price for this portfolio of parks, particularly since we were able to retain the Magic Mountain parks," said Mark Shapiro, Six Flags President and CEO. "This transaction confirms the value inherent in our major market branded parks."

 

The disposition of these seven parks is a key component of the Company's overall strategy to reduce debt and enhance operational and financial flexiblity. Company management stated earlier this year that its intent was to reduce debt by several hundred million dollars over the next several years. The agreement announced today, combined with the June 2006 sale of the land underlying its Houston AstroWorld theme park for $77 million, will result in gross cash proceeds of $352 million for debt reduction.

 

In their most recent operating years, the seven parks to be sold and the Houston AstroWorld park contributed approximately $35 million(2) of Park EBITDA, implying a valuation multiple of approximately 11 times the combined Park EBITDA.

 

"My new management team had several key priorities for Six Flags in 2006: transitioning our brand to attract families; cleaning up the parks; reducing capital expenditures; establishing a Corporate Alliances department to forge sponsorship and marketing partnerships with major consumer brands; increasing guest spending; and selling assets as a means to reduce the company's debt," said Shapiro. "With this announcement, all those steps are in full swing and we now have our agenda focused squarely on the 2007 season. A targeted increase in our media spend and our strong new entertainment alliances have us poised to realize attendance gains, making for a successful 2007 season."

 

The Company noted that obligations with respect to 2007 season passes and any committed park events, including group bookings and the previously announced Dream Nite promotion, will continue to be fulfilled under the new park ownership. Although the two Six Flags-branded parks involved in the sale, Darien Lake in Buffalo, NY and Elitch Gardens in Denver, CO, will no longer carry the Six Flags brand under the new ownership, any 2007 season passes purchased at either of those parks will continue to be honored at all Six Flags branded parks throughout the 2007 season.

 

As part of the arrangements for the acquisition, PARC will simultaneously sell the parks to CNL Income Properties Inc. (CNL), a Florida-based real estate investment trust, and lease back the parks from CNL pursuant to long- term leases. The sale is subject to satisfaction of customary closing conditions, including clearance under the Hart-Scott-Rodino Act and receipt of necessary third-party consents. The transaction is expected to be completed in March 2007.

 

The Company will conduct a call with analysts and investors on Friday, January 12, 2007 at 12:00 pm EST to discuss the transaction and revise its 2007 guidance to reflect the sale transaction. The teleconference will be broadcast live to interested parties as a listen-only Webcast on http://investors.sixflags.com/.

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Interesting. No real surprises there.

 

Though I kind of wondered if La Ronde was going to be sold.

 

Guess that means I can still get a play pass from SFMM and head up to La Ronde for the credits.

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Darn it, I was hoping to get up to Washington to get the woodie credit this year with my SF pass. Now I'll have to pay to get in.

 

Oh well, hopefully Darien Lake will finally get something new in 2008.

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"We're pleased with the sale price for this portfolio of parks, particularly since we were able to retain the Magic Mountain parks," said Mark Shapiro, Six Flags President and CEO. "This transaction confirms the value inherent in our major market branded parks."

 

Why was 6FMM up for sale if he was so interested in retaining it?

 

I hope they use the money to REDUCE THE MASSIVE DEBT LOAD!

 

Just an idea.

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Six Flags Darien Lake in Buffalo, NY

 

GRRRRRR!!!!!!!!!!!!!! I want my cheap SF season pass!!!!!!!!!!

 

Oh well...

 

Haha, looks like you'll just have to bite the bullet and get a SFKK one now, unless you want to shell out more cash and get one for Great Adventure.

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Darn it!

 

I was hoping that Elitch's would still be a 6Flags so I could go for free next time. Oh well. When I was there, I asked a few employees about the future of the park and they all were 100% confident 6Flags would still be their owner in 2007. Guess not~!

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Six Flags Darien Lake in Buffalo, NY

 

GRRRRRR!!!!!!!!!!!!!! I want my cheap SF season pass!!!!!!!!!!

 

Oh well...

 

I was worried for a minute, Darien Lake is where I'm getting my SF pass next year! Looks like they'll still be honouring them for the 2007 though. I can breathe a sigh of relief.

 

The Company noted that obligations with respect to 2007 season passes and any committed park events, including group bookings and the previously announced Dream Nite promotion, will continue to be fulfilled under the new park ownership. Although the two Six Flags-branded parks involved in the sale, Darien Lake in Buffalo, NY and Elitch Gardens in Denver, CO, will no longer carry the Six Flags brand under the new ownership, any 2007 season passes purchased at either of those parks will continue to be honored at all Six Flags branded parks throughout the 2007 season.
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Before anyone jumps for joy about this sale, just try to find a website for this PARC in Jacksonville, FL. No website exist! The only PARC in Jacksonville I could find is "Land Subdividers and Developers, Except Cemeteries"

 

http://www.manta.com/comsite5/bin/pddnb_company.pl?pdlanding=1&referid=4490&id=dd8jzb

 

Anyone else find this all odd? They're obviously not a park operator, and a land devloper buying parks is never a good sign. My guess, CNL will operate the parks until the debt is clear, then the bulldozers move in for condos and mega malls. Thank goodness SFMM wasn't included in this death sentence.

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Why was 6FMM up for sale if he was so interested in retaining it?

 

Maybe they were using SFMM to draw more attention and force the asking price up.

 

Including a major park would probably make more of a splash, and bring more interest in to kick the tires.

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I was worried for a minute, Darien Lake is where I'm getting my SF pass next year! Looks like they'll still be honouring them for the 2007 though. I can breathe a sigh of relief.

 

The Company noted that obligations with respect to 2007 season passes and any committed park events, including group bookings and the previously announced Dream Nite promotion, will continue to be fulfilled under the new park ownership. Although the two Six Flags-branded parks involved in the sale, Darien Lake in Buffalo, NY and Elitch Gardens in Denver, CO, will no longer carry the Six Flags brand under the new ownership, any 2007 season passes purchased at either of those parks will continue to be honored at all Six Flags branded parks throughout the 2007 season.

 

I don't know, Tom. That may only be for passes already purchased. If I were you, I'd look into it more by contacting the park soon. If you show up next May and want to buy a pass, it may not be valid anymore at all SF parks.

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Yeah Tom, I think you're screwed, unless you've already purchased the pass.

 

 

Haha, looks like you'll just have to bite the bullet and get a SFKK one now, unless you want to shell out more cash and get one for Great Adventure.

I think I'll be using the SF pass enough next year. An extra $30 to get one at GAdv wouldn't kill me.

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SFMM is the core of Six Flags so I don't believe they can lose it to anyone else.

We can never now what is REALLY behind this step. They can tell us all kind fo stories but in 5 years we will be all wiser with the truth behind it all.

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Does this mean that the vision Wes had of SFMM being transformed into a World Class Pavement Megacomplex will now go unfulfilled?

 

I'm so crushed right now you don't even know.

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^Wes, don't give up on your dream. There is always hope.

 

^ La Ronde could be your cheapest option.

 

Though it's also considerably out of the way.

 

Yeah, I'm going to Laronde next year, but I'll be going to SFKK and possibly SFGAdv before that. SFKK's pass is the same price DL's was.

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SFMM is the core of Six Flags so I don't believe they can lose it to anyone else.

We can never now what is REALLY behind this step. They can tell us all kind fo stories but in 5 years we will be all wiser with the truth behind it all.

 

No, SFoT, oG, and STL are the core of Six Flags, being the original three parks.

 

 

SFMM is more like a symbol of what's wrong with Six Flags as a company.

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SFMM is the core of Six Flags so I don't believe they can lose it to anyone else.

We can never now what is REALLY behind this step. They can tell us all kind fo stories but in 5 years we will be all wiser with the truth behind it all.

 

No, SFoT, oG, and STL are the core of Six Flags, being the original three parks.

 

 

SFMM is more like a symbol of what's wrong with Six Flags as a company.

 

And in recent years SFGAM,SFGADV, and SFoG have pretty much taken over as the flagship parks.

 

SFMM hasn't been Six Flags prime asset for quite awhile.

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^^

I dont think a core for the company can be determined just by which are the original parks. Some or many would argue your core assets of any company are those that draw the most money. Thus parks like Magic Mountain and Great Adventure could be considered the frachise core.

 

Also, Six Flags is a franchise known for good to great coasters. I think Magic Mountain more than symbolizes that more than whats wrong with the franchise.

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