NEW YORK, Jan. 11 PRNewswire-FirstCall - Six Flags, Inc. (NYSE: SIX) 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/.
Im glad they held onto Magic Mountain. I like that park and think Six Flags can turn it around, I actually think Six Flags Great Adventure is in worse shape.
Im also glad my season pass will still be good there in the future .
Sorry for the double post, but I couldn't seem to be able to edit my first one. I just wanted to add that it's really annoying me that all these articles i'm reading say things like "It looks like Mark Shapiro is finally getting things together to turn this company around" ARE YOU SERIOUS! He's done more for this company in a year then Burke and his administration did in a decade! They all expected this turn around the happen overnight, and they did make a lot of progress this last year, but so much more needs to be done. What they did in 2006 was as much as anyone could expect if not more. The radical changes aren't over yet, the parks may be clean-ER but they're still not clean. It's time to focus on customer service beyond just training employees differently, and shape up the parks they do have to be the best in the world for what they are.
Whoa I thought they said that these parks were going to remian six-flags owned for the rest of next season. Eh, at least they got a lot of money off this deal.
^Thats why those parks were sold. They made very little money for the chain as a whole.
I'd be worried about the fact that a real estate company owns these parks now. Seems to me that whenever the time/price is right the company can just jump in and develop everything into residential.
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I wonder now after they sell theese parks weather it will get six flags out of debt and maybe they could add more rides or coasters to expand our park and other parks! Alot of people are going to get fired though and thats sad
Former Six Flags Ride Operator - 2008-2011. "The Whizzer Guy." Also Worked at Demon, Batman, Viper, Raging Bull, Carousel, Big Easy Balloons, King Chaos, Orbit, Wiggles, Hometown Fun Machine, Triple Play, Log Flumes. I make and edit amusement park videos under the name Techie Dave Productions
[quote="w00dland]
I'd be worried about the fact that a real estate company owns these parks now. Seems to me that whenever the time/price is right the company can just jump in and develop everything into residential.[/quote]
I am not worried, The people who own it are Former Theme park Employees, Mainly from Six Flags and Alfa Parks (When is closed now)
raginbullrider wrote:I wonder now after they sell theese parks weather it will get six flags out of debt and maybe they could add more rides or coasters to expand our park and other parks! Alot of people are going to get fired though and thats sad
...Six Flags Has 2.1 Billion dollars of debt as of september 06...312 million isn't going to do much for that....And as for the sentance about people getting fired...What?