Great Wolf Resorts Inc. has agreed an acquisition deal with an affiliate of Apollo Global Management for a cash only buy out of $5.00 per share. The announcement details a definitive merger agreement between Great Wolf, North America’s largest indoor waterpark resort family and Apollo, a global frontrunner in asset management.
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Apollo will acquire Great Wolf for around $703 million and will assume the company’s outstanding debt. This represents substantial value to shareholders and will provide Great Wolf with an experienced partner who has a significant amount of capital to facilitate growth.
Apollo offered the cash tender, which is expected to begin today, and it is thought that they will also make an offer to buy up all outstanding Great Wolf shares for $5.00 each. This represents a premium of 72.9% over a six month average, a 50.4% premium over a 90 day average and 19.3% over the company’s closing stock price on March 12th 2012.
The move came after an independent review of the Great Wolf board of directors and was subsequently anonymously approved. The board have also recommended that stockholders in Great Wolf tender shares.
Great Wolf is North America’s leading indoor waterpark resort destination provider, and is considered the industry leader in family waterpark attractions. The first Great Wolf waterpark facility opened in 1997 in Wisconsin Dells, Wisconsin and the company went on to operate 11 attractions throughout the region.
Great Wolf resorts have a variety of amenities for guests to choose from, which are usually spread over an area of 40, 000 to 100, 000 square feet, with around 300-600 rooms. The indoor entertainment areas tend to include: arcade/game rooms, fitness rooms, themed restaurants, spas, supervised children’s activities and other facilities.
“We are very excited to support the continued growth of Great Wolf Resorts, ” said Aaron Stone, Senior Partner at Apollo Global Management.
“Great Wolf has built a remarkable company with an outstanding family leisure and entertainment offering. We feel very fortunate to have the opportunity to continue the Company’s commitment to provide the very best in family destination resorts.”
“Kim Schaefer, Chief Executive Officer for Great Wolf, and her team, have done a fantastic job building this great company and consistently delivering a special experience to their guests. We are hono[u]red to have the opportunity to partner with such a talented group of people and look forward to working with them to continue to build on the many strengths of Great Wolf, ” said Scott Ross, Partner at Apollo Global Management.
“After a thorough assessment, we concluded that the proposal put forth by Apollo is the best way to maximize value for shareholders, who will receive a substantial and immediate cash premium for their shares, ” said Schaefer.
“We are excited about the prospect of working with Apollo as we further capitalize on opportunities to refine and grow our Great Wolf Lodge brand. With the help of our talented and dedicated team, we will continue to offer our guests the superior experience that they have come to expect from a Great Wolf Lodge getaway.”
The venture is being overseen by Deutsche Bank Securities Inc. who is serving as financial advisor to the Company, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as the Company’s legal advisor.
Morgan Stanley & Co. LLC, UBS Investment Bank and Nomura Securities International, Inc. are serving as financial advisors to Apollo, and Akin, Gump, Strauss, Hauer & Feld LLP is serving as Apollo’s legal advisor.
