Cedar Fair Entertainment Co. plans to enter Texas market with $261 million acquisition

Published by: Scott Suttel/Crain’s Cleveland Business
Published date: June 2019

The Cedar Fair Entertainment Co. empire is about to grow.

The Sandusky-based operator of regional amusement parks and water parks on Thursday morning, June 13, announced it has agreed to buy, for $261 million in cash, two water parks and one resort in Texas: Schlitterbahn Waterpark and Resort New Braunfels, and Schlitterbahn Waterpark Galveston. The seller is Schlitterbahn Waterparks & Resorts, which is based in New Braunfels, Texas. Cedar Fair also said it has the right to buy a Schlitterbahn property in Kansas City, Kan., for $6 million.

The transaction, subject to regulatory approval, is expected to close during the second quarter of 2019. Cedar Fair said in a news release that it plans to finance the deal through additional long-term borrowings.

“We are very excited about the opportunity to bring these two award-winning Texas water parks into the Cedar Fair family,” said Richard Zimmerman, Cedar Fair’s president and CEO, in a statement.

He said the 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. The investments we have 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.”

At present, Cedar Fair’s parks are in Ohio (home to its flagship, Cedar Point), California, North Carolina, South Carolina, Virginia, Pennsylvania, Minnesota, Missouri, Michigan and Toronto, Ontario.

The 70-acre Schlitterbahn Waterpark New Braunfels, which is on the banks of the Comal River in New Braunfels, features more than 50 attractions and 221 rooms. It was voted “Best Water Park in the World” by Amusement Today for 21 consecutive years. Schlitterbahn Waterpark Galveston is outside Houston, on Galveston Island. The 70,000-square-foot park features more than 30 attractions.

The two Texas water parks and the resort being acquired “entertained 1.2 million guests in 2018 and generated annual revenues of approximately $68 million,” Cedar Fair said in the release.

Cedar Fair in 2018 drew 25.9 million guests to its parks and reported $1.35 billion in revenue. Its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $468 million, representing a 35% adjusted EBITDA margin.

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