You Must Be 4 Billion Dollars Tall to Ride the Magnum

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Cedar Fair, finding the rare market peak of an industry known this summer primarily for severing the limbs of small children, decided it was the perfect time to solicit bids from PE firms. Really expensive bids at a 11x cash flow multiple (which at an expected $330mm in cash flow generated this year amounts to $3.7bn). The company has a market cap of $1.6bn and debt of $1.9bn.
There is a catch. Not only do you get to dish out a ton of cash for a relatively low growth (and especially tenuous at the moment) business, but you get to retain the management team best known for not totally killing its brand through over-expansion and horrible cross-branding (the "we're better than those guys over at Six Flags" strategy, and now with a new "leave with the limbs you brought" guarantee!). The New York Post reports that Cedar Fair "quietly reached out to private equity firms to gauge their interest in a buyout on the condition that the company's management team remains in place," so quietly that shares have spiked since (and before) the announcement. Quiet reporting - does the New York Post know any other kind?
Cedar Fair bought Paramount Parks from CBS last year for $1.2bn, effectively doubling in size to a 12 amusement park, 6 water park (which are not amusing), 6 hotel owning entity. Cedar Fair owns the Cedar Point amusement park in Sandusky, Ohio, known as 'that place referred to in Tommy Boy' and the home of Cedar Point.
Shares of Cedar Fair, a stock so zany its ticker is FUN (NYSE), are up almost 3.0% in daily trading.
(The Magnum XL-200 is a roller coaster at Cedar Point)
TICKET TO RIDE [New York Post]

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