Worlds of Fun owner sells to private equity firm

TOLEDO, Ohio — The amusement park industry's bumpy ride this year took another twist as one of the nation's biggest park operators said it has reached a deal to be acquired by a private equity firm.

North America's third-largest chain, Ohio-based Cedar Fair, will turn over its 11 amusement parks, seven water parks and five hotels to Apollo Global Management for about $635 million in cash. Cedar Fair owns Worlds of Fun and Oceans of Fun in Kansas City, Mo.

The deal announced late Wednesday tops off 12 months that have turned the industry upside down with declining attendance, private acquisitions and the bankruptcy of Six Flags, the world's largest regional theme park company.

Cedar Fair's deal comes just two months after Anheuser-Busch InBev announced it would sell its 10 theme parks across the U.S. to private equity firm Blackstone Group for at least $2.3 billion.

"It all says we're seeing limited growth," said Dennis Spiegel, a theme-park consultant who is president of Cincinnati-based International Theme Park Services. "We're still drawing and attracting a lot of people, but this does say we're a mature industry now."

Attendance and revenue at many big parks have flattened in recent years, and it's no longer a guarantee that opening an expensive roller coaster at a major theme park will bring in waves of new customers.

That made it tough for Cedar Fair and Six Flags to pay off huge debt that they accumulated on spending sprees for new parks.

Cedar Fair transformed from a regional chain to an industry giant in 2006 with its $1.24 billion acquisition of Paramount Parks.

The deal added five amusement parks to its lineup, including Kings Island near Cincinnati, but also gave Cedar Fair a heavy debt load that it could not escape.

Apollo now will assume Cedar Fair's $1.7 billion debt as long as holders of two-thirds of the company's shares approve the transaction.

Cedar Fair, based in Sandusky, already had made a number of moves in the past year to shore up its bottom line. It sold a large chunk of land next to Canada's Wonderland, its park outside Toronto, and the company cut cash distributions to unit holders.

It also put up for sale two of its amusement parks along with the site of a now-closed park near Cleveland, but no deals for the parks were reached.

None of that was enough, especially in the face of a weak economy.

Cedar Fair said that said attendance dropped by 1.2 million visitors during the first three quarters, and guests who did visit the parks spent less money.

Other amusement parks tried similar tactics. The Walt Disney Co. began offering numerous discounts and specials to keep visitors coming. Six Flags posted a second-quarter loss of $121 million, noting that groups, companies, schools and other organizations cut out trips.