Combined Company Will Benefit from Expanded and
Complementary Portfolio of 42 Iconic Parks and 9 Resort Properties
Across 17 States, Canada and Mexico
Diversified Geographic Footprint with a More
Balanced Presence in Year-Round Operating Climates
More Robust Operating Model and Technology
Platform to Drive Improved Guest Experience and Park
Efficiencies
Strong Financial Profile and Cash Flow
Generation Expected to Facilitate Investments in Park Upgrades,
Expansions and New, Innovative Offerings
Approximately $200 Million of Annual Synergies,
Including $120 Million of Cost Savings Anticipated Within Two Years
Following Close
Expected to be Accretive to EPS for Cedar Fair
Unitholders and Six Flags Shareholders within the First 12 Months
Following Close
Companies to Host Conference Call Today at 8:30
a.m. ET
Cedar Fair (NYSE: FUN) and Six Flags Entertainment Corporation
(NYSE: SIX) today announced that they have entered into a
definitive merger agreement to combine in a merger of equals
transaction. The combined company, with a pro forma enterprise
value of approximately $8 billion based on both companies’ debt and
equity values as of October 31, 2023, will be a leading amusement
park operator in the highly competitive leisure space with an
expanded and diversified footprint, a more robust operating model
and a strong revenue and cash flow generation profile.
Under the terms of the merger agreement, which has been
unanimously approved by the Boards of Directors of both companies,
Cedar Fair unitholders will receive one share of common stock in
the new combined company for each unit owned, and Six Flags
shareholders will receive 0.5800 (the “Six Flags Exchange Ratio”)
shares of common stock in the new combined company for each share
owned. Following the close of the transaction, Cedar Fair
unitholders will own approximately 51.2%, and Six Flags
shareholders will own approximately 48.8%, of the combined
company’s fully diluted share capital on a pro forma basis. One
business day prior to the close of the transaction, Six Flags will
declare a special cash dividend composed of: (i) a fixed amount of
$1.00 per outstanding Six Flags share, totaling approximately $85
million in the aggregate, plus, (ii) an amount per outstanding Six
Flags share equal to (a) the aggregate per unit distributions
declared or paid by Cedar Fair to unitholders with a record date
following today’s date and prior to the close of the transaction,
multiplied by (b) the Six Flags Exchange Ratio, which special
dividend will be payable to Six Flags shareholders of record as of
one business day prior to the close of the transaction, contingent
on the closing of the transaction.
“Our merger with Six Flags will bring together two of North
America’s iconic amusement park companies to establish a highly
diversified footprint and a more robust operating model to enhance
park offerings and performance,” said Richard Zimmerman, President
and Chief Executive Officer of Cedar Fair. “Together, we will have
an expanded and complementary portfolio of attractive assets and
intellectual property to deliver engaging entertainment experiences
for guests. The combination also creates an enhanced financial
profile with strong cash flow generation to accelerate investments
in our parks to delight our guests, driving increased levels of
demand and in-park value and spending. I have great respect for the
Six Flags team and look forward to joining forces as we embark on
this next chapter together.”
“The combination of Six Flags and Cedar Fair will redefine our
guests’ amusement park experience as we combine the best of both
companies,” added Selim Bassoul, President and Chief Executive
Officer of Six Flags. “Six Flags and Cedar Fair share a strong
cultural alignment, operating philosophy, and steadfast commitment
to providing consumers with thrilling experiences. By combining our
operational models and technology platforms, we expect to
accelerate our transformation activities and unlock new potential
for our parks. We are excited to unite the Cedar Fair and Six Flags
teams to capitalize on the tremendous growth opportunities and
operational efficiencies of our combined platform for the benefit
of our guests, shareholders, employees, and other
stakeholders.”
Compelling Strategic and Financial Benefits
- A Successful Amusement Park Operator with Complementary
Portfolio of Attractive Assets: The combined company will
operate a portfolio of 27 amusement parks, 15 water parks and 9
resort properties across 17 states in the U.S., Canada, and Mexico.
The company’s complementary portfolio will include some of the most
iconic parks in North America with significant brand equity and
loyal, recurring guest bases within the highly competitive leisure
space. The combined company will also have entertainment
partnerships and a portfolio of beloved IP such as Looney Tunes, DC
Comics and PEANUTS to develop engaging new attractions enabled by
compelling characters, environments, and storytelling.
- Diversified Footprint and Guest Experiences: Cedar Fair
and Six Flags have minimal market overlap of park operations, and
the combined company’s complementary geographic footprint is
expected to mitigate the impact of seasonality and reduce earnings
volatility through a more balanced presence in year-round operating
climates. The portfolio will include diversified experiences for
guests including safaris and animal experiences, campgrounds,
sports facilities and luxury lounges, enabling the combined company
to better meet rising consumer demand for varied and engaging
entertainment options.
- Enhanced Operating Platform to Improve Guest
Experiences: By uniting Cedar Fair and Six Flags’ complementary
operating capabilities, the combined company will benefit from a
more robust operating platform for improved park offerings and more
efficient systemwide performance. The companies expect to leverage
Cedar Fair’s recent park investment experience to accelerate the
transformation underway across Six Flags’ portfolio. Cedar Fair and
Six Flags will seek to create a more engaging and immersive guest
experience. The combined company will also offer expanded park
access to season pass holders along with an enhanced, combined
loyalty program featuring additional perks.
- Experienced and Proven Leadership Team: The senior
leadership teams of Six Flags and Cedar Fair bring different and
complementary skillsets and experience to the combined company,
including decades of park operating experience as well as
significant expertise integrating businesses and achieving synergy
targets.
- Significant Cost Savings and Revenue Uplift Opportunity:
Following the close of the transaction, Cedar Fair and Six Flags
expect the combined company will benefit from the significant value
created by total anticipated annual synergies of $200 million.
Approximately $120 million of these synergies are expected to be
related to identified administrative and operational cost savings,
which the companies anticipate realizing within two years following
transaction close. The companies also expect to leverage their
complementary operating capabilities to deliver additional revenue
uplift, generating approximately $80 million of incremental EBITDA
that the companies anticipate realizing within three years of
transaction close.
- Strong Financial Profile: Over the last 12 months,
through the third quarter of fiscal 2023, Six Flags and Cedar Fair
collectively entertained 48 million guests, and, as a combined
company, would generate pro forma $3.4 billion1 in revenue, $1.2
billion1 in Adjusted EBITDA2, and $826 million1,3 of free cash
flow4, reflecting run rate cost savings of $120 million and revenue
uplift resulting in $80 million of incremental EBITDA. The
transaction is expected to be accretive to earnings per share for
Cedar Fair unitholders and Six Flags shareholders within the first
12 months following transaction close. The combined company is also
expected to have a pro forma leverage ratio of approximately 3.7x
net debt to Adjusted EBITDA, inclusive of synergies, with a path to
reduce the leverage ratio to approximately 3.0x within two years of
transaction close.
- Significant Free Cash Flow Generation and Enhanced Financial
Flexibility: The combined company’s increased free cash flow
will provide it with greater flexibility to invest in new rides and
attractions, broader food and beverage selections, additional
in-park offerings, and cross-park initiatives, such as consumer
technology and enhanced guest services. The combined company’s
resources are expected to be strategically deployed to grow
attendance, increase per capita spending, and improve
profitability, all while enhancing guests’ value and experience
across the park portfolio. The combined company is committed to
allocating capital to maximize shareholder returns once the company
achieves its targeted net leverage ratio.
Leadership, Corporate Governance and Headquarters
The combined company will be led by a proven management team
that reflects the strengths and capabilities of both organizations.
Upon closing of the transaction, Richard Zimmerman, President and
Chief Executive Officer of Cedar Fair, will serve as President and
Chief Executive Officer of the combined company and Selim Bassoul,
President and Chief Executive Officer of Six Flags, will serve as
Executive Chairman of the combined company’s Board of Directors.
Brian Witherow, Chief Financial Officer of Cedar Fair, will serve
as Chief Financial Officer of the combined company and Gary Mick,
CFO of Six Flags, will serve as Chief Integration Officer of the
combined company.
Following closing of the transaction, the newly formed Board of
Directors of the combined company will consist of 12 directors, six
from the Cedar Fair Board and six from the Six Flags Board.
Upon closing of the transaction, the combined company will
operate under the name Six Flags and trade under the ticker symbol
FUN on the NYSE and will be structured as a C Corporation. The
combined company will be headquartered in Charlotte, North
Carolina, and will maintain significant finance and administrative
operations in Sandusky, Ohio.
Approvals and Closing
The merger is expected to close in the first half of 2024,
following receipt of Six Flags shareholder approval, regulatory
approvals, and satisfaction of customary closing conditions.
Approval by Cedar Fair unitholders is not required. Six Flags’
largest shareholder, which owns approximately 13.6% of Six Flags’
shares outstanding, has signed a voting and support agreement to
vote in favor of the transaction. The transaction is not expected
to trigger any change of control provision under Cedar Fair’s and
Six Flags’ respective outstanding Notes. The companies expect to
refinance their respective revolving credit facilities, and Six
Flags expects to refinance the Six Flags Term Loan, ahead of
transaction close.
Cedar Fair and Six Flags Third Quarter 2023 Results
In separate press releases today, Cedar Fair and Six Flags
reported results for the third quarter of fiscal year 2023. The
Cedar Fair release is available at https://ir.cedarfair.com and the
Six Flags release can be found at
https://investors.sixflags.com.
Advisors
Perella Weinberg Partners is serving as exclusive financial
advisor and Weil, Gotshal & Manges LLP and Squire Patton Boggs
(US) LLP are serving as legal counsel to Cedar Fair. Goldman Sachs
& Co. LLC is serving as exclusive financial advisor and
Kirkland & Ellis LLP is serving as legal counsel to Six
Flags.
Conference Call and Additional Materials
Cedar Fair, L.P. (NYSE: FUN) and Six Flags Entertainment
Corporation (NYSE: SIX) will host a conference call at 8:30 a.m. ET
today to discuss the pending merger and review both companies’
third quarter 2023 results. Participants on the call will include
Six Flags President and CEO Selim Bassoul, Cedar Fair President and
CEO Richard Zimmerman, Cedar Fair Executive Vice President and CFO
Brian Witherow, and Six Flags CFO Gary Mick.
Investors and all other interested parties can access a live,
listen-only audio webcast of the call on the Cedar Fair and Six
Flags websites. Those unable to listen to the live webcast can
access a recorded version of the call on either company’s investor
website Past Events, shortly after the live call’s conclusion.
A replay of the call will also be available by phone starting at
approximately noon ET on Thursday, Nov. 2, 2023, until noon ET,
Thursday, Nov. 9, 2023. To access the phone replay, please dial
(866) 813-9403 or (929) 458-6194, followed by the Conference ID:
830378.
About Cedar Fair
Cedar Fair Entertainment Company (NYSE: FUN), one of the largest
regional amusement-resort operators in the world, is a publicly
traded partnership headquartered in Sandusky, Ohio. Focused on its
mission to make people happy by providing fun, immersive, and
memorable experiences, the Company owns and operates 13 properties,
consisting of 11 amusement parks, four separately gated outdoor
water parks, and resort accommodations totaling more than 2,300
rooms and more than 600 luxury RV sites. Cedar Fair’s parks are
located in Ohio, California, North Carolina, South Carolina,
Virginia, Pennsylvania, Minnesota, Missouri, Michigan, Texas and
Toronto, Ontario.
This news release and prior releases are
available under the News tab at http://ir.cedarfair.com
About Six Flags Entertainment Company
Six Flags Entertainment Corporation is the world’s largest
regional theme park company with 27 parks across the United States,
Mexico and Canada. For 62 years, Six Flags has entertained hundreds
of millions of guests with world-class coasters, themed rides,
thrilling water parks and unique attractions. Six Flags is
committed to creating an inclusive environment that fully embraces
the diversity of our team members and guests. For more information,
visit www.sixflags.com
Forward Looking Statements
This press release contains certain “forward-looking statements”
within the meaning of the federal securities laws, including
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historic fact, included in
this press release that address activities, events of developments
that Cedar Fair or Six Flags expects, believes or anticipates, will
or may occur in the future are forward-looking statements. Words
such as “anticipate,” “believe,” “create,” “expect,” “future,”
“guidance,” “intend,” “plan,” “potential,” “seek,” “target,”
“synergies,” “will,” “would,” similar expressions, and variations
or negatives of these words identify forward-looking statements.
However, the absence of these words does not mean that the
statements are not forward-looking. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain, such as statements about the consummation of the
proposed transaction and the anticipated benefits thereof. All such
forward-looking statements are based upon current plans, estimates,
expectations and ambitions that are subject to risks, uncertainties
and assumptions, many of which are beyond the control of Cedar Fair
and Six Flags, and that could cause actual results to differ
materially from those expressed in such forward-looking statements.
Important risk factors that may cause such a difference include,
but are not limited to: the expected timing and likelihood of
completion of the proposed transaction, including the timing,
receipt and terms and conditions of any required governmental and
regulatory approvals of the proposed transaction and Six Flags
stockholder approval; anticipated tax treatment, unforeseen
liabilities, future capital expenditures, revenues, expenses,
earnings, synergies, economic performance, indebtedness, financial
condition, losses, future prospects, business and management
strategies for the management, expansion and growth of the combined
company’s operations and other conditions to the completion of the
proposed transaction, including the possibility that any of the
anticipated benefits of the proposed transaction will not be
realized or will not be realized within the expected time period;
the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement; the
outcome of any legal proceedings that may be instituted against
Cedar Fair, Six Flags or their respective directors and others
following announcement of the merger agreement and proposed
transaction; the inability to consummate the transaction due to the
failure to satisfy other conditions to complete the transaction;
risks that the proposed transaction disrupts and/or harms current
plans and operations of Cedar Fair or Six Flags, including that
management’s time and attention will be diverted on
transaction-related issues; the amount of the costs, fees, expenses
and charges related to the transaction, including the possibility
that the transaction may be more expensive to complete than
anticipated; the ability of Cedar Fair and Six Flags to
successfully integrate their businesses and to achieve anticipated
synergies and value creation; potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the proposed transaction; legislative, regulatory
and economic developments and changes in laws, regulations, and
policies affecting Cedar Fair and Six Flags; potential business
uncertainty, including the outcome of commercial negotiations and
changes to existing business relationships during the pendency of
the proposed transaction that could affect Cedar Fair’s and/or Six
Flags’ financial performance and operating results; acts of
terrorism or outbreak of war, hostilities, civil unrest, and other
political or security disturbances; the impacts of pandemics or
other public health crises, including the effects of government
responses on people and economies; risks related to the potential
impact of general economic, political and market factors on the
companies or the proposed transaction; those risks described in
Item 1A of Cedar Fair’s Annual Report on Form 10-K, filed with the
Securities and Exchange Commission (the “SEC”) on February 17,
2023, and subsequent reports on Forms 10-Q and 8-K; those risks
described in Item 1A of Six Flags’ Annual Report on Form 10-K,
filed with the SEC on March 7, 2023, and subsequent reports on
Forms 10-Q and 8-K; and those risks that will be described in the
registration statement on Form S-4 and accompanying proxy
statement/prospectus available from the sources indicated
below.
These risks, as well as other risks associated with the proposed
transaction, will be more fully discussed in the registration
statement on Form S-4 that will be filed by CopperSteel HoldCo,
Inc. (“HoldCo”) with the SEC in connection with the proposed
transaction, which will contain a prospectus relating to the
issuance of New Holdco securities in the proposed transaction and a
proxy statement relating to the special meeting of the stockholders
of Six Flags. While the list of factors presented here is, and the
list of factors to be presented in the registration statement on
Form S-4 will be, considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements. The
ability of Cedar Fair or Six Flags to achieve the goals for the
proposed transaction may also be affected by our ability to manage
the factors identified above. We caution you not to place undue
reliance on any of these forward-looking statements as they are not
guarantees of future performance or outcomes and actual performance
and outcomes may differ materially from those made in or suggested
by the forward-looking statements contained in this press release.
Neither Cedar Fair nor Six Flags assumes any obligation to publicly
provide revisions or updates to any forward-looking statements,
whether as a result of new information, future developments or
otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws.
Important Information about the Transaction and Where to Find
It
In connection with the proposed transaction, Cedar Fair and Six
Flags will cause HoldCo to file with the SEC a registration
statement on Form S-4 that will include a proxy statement of Six
Flags and a prospectus of HoldCo. A definitive proxy
statement/prospectus will be mailed to stockholders of Six Flags.
Cedar Fair, Six Flags and HoldCo may also file other documents with
the SEC regarding the proposed transaction. This release is not a
substitute for the registration statement, proxy
statement/prospectus or any other document that Cedar Fair, Six
Flags or HoldCo (as applicable) may file with the SEC in connection
with the proposed transaction. BEFORE MAKING ANY VOTING AND/OR
INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF CEDAR FAIR
AND SIX FLAGS ARE URGED TO READ THE REGISTRATION STATEMENT, THE
PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT
ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS
OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and security holders may obtain free copies of
the registration statement and the proxy statement/prospectus (when
they become available), as well as other filings containing
important information about Cedar Fair or Six Flags, without charge
at the SEC’s Internet website (http://www.sec.gov). Investors and
security holders may obtain free copies of the registration
statement and the proxy statement/prospectus (when available) and
other documents filed with the SEC by Cedar Fair, Six Flags and
HoldCo through the web site maintained by the SEC at www.sec.gov or
by contacting the investor relations department of Cedar Fair or
Six Flags at the following:
Cedar Fair Investor Contact: Michael Russell, 419.627.2233 Media
Contact: Gary Rhodes, 704.249.6119 Alternate Media Contact: Andrew
Siegel / Lucas Pers, Joele Frank, 212.355.4449
Six Flags Evan Bertrand Vice President, Investor Relations and
Treasurer +1-972-595-5180 investorrelations@sftp.com Media Contact:
Robin Weinberg / Hayley Cook / Bridget Nagle, FGS Global,
212.687.8080
The information included on, or accessible through, Cedar Fair’s
or Six Flags’ website is not incorporated by reference into this
release.
Participants in the Solicitation
Cedar Fair, Six Flags, HoldCo and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from Six Flags stockholders in respect of
the proposed transaction. Information regarding Cedar Fair’s
directors and executive officers, including a description of their
direct interests, by security holdings or otherwise, is contained
in Cedar Fair’s Form 10-K for the year ended December 31, 2022
filed with the SEC on February 17, 2023 and its proxy statement
filed with the SEC on April 13, 2023, and subsequent statements of
changes in beneficial ownership on file with the SEC. Information
regarding Six Flags’ directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is contained in Six Flags’ Form 10-K for the year ended
January 1, 2023 filed with the SEC on March 7, 2023 and its proxy
statement filed with the SEC on March 28, 2023, and subsequent
statements of changes in beneficial ownership on file with the SEC.
Additional information regarding the participants in the proxy
solicitations and a description of their direct or indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement/prospectus and other relevant materials filed
with the SEC when they become available.
No Offer or Solicitation
This release is for informational purposes and is not intended
to, and shall not, constitute an offer to sell or the solicitation
of an offer to buy any securities or a solicitation of any vote or
approval, nor shall there be any offer, solicitation or sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
_______________________
1 Reflects combined company run rate cost savings of $120
million and revenue uplift resulting in $80 million of incremental
EBITDA. 2 Adjusted EBITDA for Six Flags excludes the net income
attributable to non-controlling interests in the Adjusted EBITDA of
partnership parks. 3 Excludes $65 million of one-time
implementation costs and $90 million of incremental CapEx at the
combined company, which do not represent run-rate view of FCF
post-synergies. 4 Free Cash Flow (FCF) defined as Adjusted EBITDA
less CapEx.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102695482/en/
Cedar Fair Investor Contact: Michael Russell, 419.627.2233 Media
Contact: Gary Rhodes, 704.249.6119 Alternate Media Contact: Andrew
Siegel / Lucas Pers, Joele Frank, 212.355.4449
Six Flags Evan Bertrand Vice President, Investor Relations and
Treasurer +1-972-595-5180 investorrelations@sftp.com Media Contact:
Robin Weinberg / Hayley Cook / Bridget Nagle, FGS Global,
212.687.8080
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