A consortium of investors comprised of Blackstone, owner of Clarion Events; KIRKBI, owner of the LEGO brand; and global investor CPPIB has agreed terms of a recommended offer for Merlin Entertainments plc, which would take the company private.
The consortium stated that it would pay 455p in cash per Merlin share, valuing Merlin’s shares at more than £4.7bn (a a multiple of 12.0x 2018A EBITDA) , or close to £6bn including debt. The deal would be one of the larger recent European buyouts.
Merlin operates a number of well-known attractions, venues and brands including Madame Tussauds, Sea Life, The Dungeons (The London Dungeon etc.), Aton Towers, Thorpe Park, Legoland, The London Eye and more. The company also runs The Bear Grylls Adventure located on the NEC site in Birmingham, another Blackstone-owned company.
The offer will be made by a newly incorporated company which has been formed on behalf of the members of the consortium, with each of KIRKBI and the Blackstone/CPPIB group owning 50 per cent upon completion.
In recent years Merlin Entertainments has been affected by Brexit, fluctuations in domestic tourism in the UK and a serious accident on a rollercoaster at Alton Towers in June 2015.
KIRKBI has maintained a significant strategic shareholding in Merlin since the sale of Legoland Parks to the Company in 2005, and the company jointly controlled Merlin with Blackstone until its public listing in 2013.
Søren Thorup Sørensen, chief executive officer, KIRKBI A/S, commented: “As the long-term owner of the LEGO® brand and as a strategic shareholder in Merlin since 2005, we have great pride and passion for this amazing company, its management team and its employees. With a shared understanding of the business and its culture, we believe that this group of investors has the unique collective resources necessary to equip Merlin, including the LEGOLAND® Parks and LEGOLAND® Discovery Centres, for their next phase of growth. We are committed to ensuring LEGOLAND® and the other activities in Merlin reach their full potential, which we believe is best pursued under private ownership, in order to deliver fantastic experiences to visitors of all ages around the world.”
Joe Baratta, global head of private equity at Blackstone, added: “We are pleased to partner with KIRKBI and CPPIB to acquire a business we know very well. We are prepared to commit the substantial resources required to support the long-term objectives of Merlin, which will require significant investment to ensure its long-term success. We believe we are uniquely placed through our Core private equity strategy to make this investment alongside our partners at KIRKBI and CPPIB. We look forward to backing Nick Varney and his strong management team in driving Merlin into the future."
Ryan Selwood, managing director – head of direct private equity at CPPIB, concluded: “Merlin has established itself as a globally diversified, world-class operator of themed attractions and entertainment. Its ability to partner with a number of leading global brands to deliver high-quality family entertainment has been key to Merlin’s success. Through close collaboration with our partners, we look forward to promoting the steady growth, long-term capitalisation and continued international expansion of this business, which aligns well with CPPIB’s long-horizon investment strategy.”