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Amusement Parks: CVC Capital Partners agrees acquisition of stake in Merlin Entertainments Group

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Merlin Entertainments Group (‘Merlin’), Europe’s leading and the world’s second-largest visitor attraction operator, announces that Funds advised by CVC Capital Partners (‘CVC’) have agreed to acquire a 28 per cent stake in the Group in a move which will underpin Merlin’s ambitious growth plans.

Under the transaction, which values Merlin at £2.25bn, Blackstone has reduced its stake, but will continue to hold a significant interest in the company. KIRKBI, the privately-held, family-owned investment and holding company that controls the LEGO Group, has kept its shareholding unchanged. DIC has disposed of its remaining stake in line with its strategy of moving out of non-core holdings.

Merlin’s ownership structure is now: KIRKBI 36 per cent, Blackstone 34 per cent and CVC 28 per cent. The management of Merlin will hold the remaining shares, with the owners setting aside a further significant stake for a staff incentive plan. Merlin is in advanced discussions around extending the maturities on its existing debt facilities, but the transaction is not subject to lender consent and Merlin does not intend to increase its financial leverage, which will position the company well to fund its ambitious growth programme.

Nick Varney, Chief Executive of Merlin, said: “We are delighted that CVC has decided to invest in Merlin Entertainments as we continue to pursue our exciting plans to expand this unique business. This deal recognises the inherent value and potential of the business and will provide us with the on-going investment necessary to help us achieve our ambitions. Merlin has a long and consistent record of strong growth in both revenues and profits, industry leading margins and high returns on invested capital.  We have successfully followed a clear and proven strategy to build a high-growth international family entertainment business, founded on strong brands and a portfolio of attractions balanced by geographies, products and demographics.

“Having thoroughly reviewed all the options for the next phase of ownership of Merlin, we believe this transaction represents the best way forward. We are very excited about this next stage in our story and look forward to working with CVC, alongside our continuing investors. Merlin has prospered under private-equity ownership and we believe that we will continue to do so. Our experienced management team has the ability and ambition to continue to deliver on our plans. This transaction will give us a substantial platform to further fuel our growth while delivering unforgettable experiences for our many millions of customers worldwide.”

Rob Lucas, Managing Partner at CVC, said: “Merlin is a unique family entertainment group operating in exciting markets. It is driven by a committed and dedicated management team and backed by supportive owners who have invested to create this successful international business. We have been impressed by the significant growth that Merlin has delivered to date – but there is more to come. We at CVC are now pleased to be part of the ownership structure, and look forward to working with management and supporting Merlin in this next phase of international growth.”

Joseph Baratta, Senior Managing Director of Blackstone, said: “Merlin has delivered great returns for Blackstone investors. We are very proud of our involvement with the company and the substantial investment it has made in local communities around the world. This deal with CVC will allow us to realise part of our investment, while remaining a committed part of the ownership team of a business which we believe will continue to deliver great growth.”

Soren Thorup Sorensen, Chief Executive Officer of KIRKBI, said: “KIRKBI’s long-term investment in Merlin is a strategic priority. Merlin is our partner in managing the future growth of the LEGOLAND Parks. The company has the culture, management and drive to achieve great things and we want to remain a part of that throughout their continued development.”

For further information please contact:

Merlin Entertainments Group       Tel: ++ 4420 8899 6110/ ++ 208 948 4225 / ++ 7774 415372
Sally Ann Wilkinson, Penny Roberts

About MERLIN ENTERTAINMENTS GROUP

MERLIN ENTERTAINMENTS GROUP is the leading name in location-based, family entertainment, and has seen the most successful and dynamic growth of any company in the sector over the last five years.  Europe’s Number 1 and the world’s second-largest visitor attraction operator, Merlin currently has 62 attractions, six hotels/two holiday villages in 13 countries and across three continents. The company aims to deliver memorable and rewarding experiences to its 38.5 million visitors worldwide, through its iconic global and local brands, and the commitment and passion of its managers and more than 14000 employees. Merlin Entertainments operates the following attractions – SEA LIFE, Madame Tussauds, LEGOLAND, The Merlin Entertainments London Eye, Dungeons, Gardaland, LEGOLAND Discovery Centres, Alton Towers Resort, Warwick Castle, Thorpe Park, Chessington World of Adventures, Underwater Adventures, Heide Park and Earth Explorer.

 Merlin Entertainments is a privately owned company. Its primary shareholders are the Blackstone Group, which purchased the company in May 2005, KIRKBI A/S, CVC and the management team.

 MERLIN SHAREHOLDERS

About Blackstone

Blackstone (NYSE: BX) is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our alternative asset management businesses include the management of corporate private equity funds, real estate funds, funds of hedge funds, credit oriented funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com.

 KIRKBI A/S is a privately held, family-owned investment and holding company based in Billund, Denmark.  Its holdings include a 75% ownership share in the LEGO Group, the remaining 25% being held by a family foundation.

The LEGO Group was founded in 1932 and today the group is one of the world’s leading manufacturers of play materials for children, employing approximately 8, 000 people globally.  The LEGO Group is committed to the development of children’s creative and imaginative abilities.  LEGO products can be purchased in more than 130 countries.

LEGO and the LEGO logo are trademarks of The LEGO Group. ©2010 The LEGO Group.

About CVC Capital Partners

CVC Capital Partners (‘CVC’) is one of the world’s leading Private Equity and investment advisory firms. Founded in 1981, CVC now has a network of 20 offices and over 220 employees throughout Europe, Asia and the United States. CVC funds, raised from pension funds, financial institutions and various other partners, seek to identify attractive investments and then develop sustainable, long-term value in close partnership with management teams. Today, CVC manages in total over US$38 billion in funds, and is currently investing from funds with an aggregate of US$18 billion in available equity capital. In total, CVC has completed over 250 investments across a wide range of industries and countries. Today, CVC funds own 53 companies worldwide, employing approximately 400, 000 people in numerous countries. Together these companies have combined annual sales of over US$100 billion. Further information is available at www.cvc.com

About Dubai International Capital LLC

Dubai International Capital LLC is an international investment company established in 2004 as a wholly owned subsidiary of Dubai Holding. DIC invests private funds on behalf of Dubai Holding with a mandate to build a portfolio of internationally diversified assets. DIC invests via two core divisions Private Equity and Emerging Markets.          DIC Private Equity invests in high performing mid-cap companies in Europe and North America with a focus on secondary buyouts that include Travelodge, Merlin Entertainments, Doncasters, FastenTech, Mauser, Alliance Medical, and Almatis.

DIC Emerging Markets invests in buyouts, buy-ins, listed equities, single-country funds and sector specific funds with a geographical focus in the Middle East.  Notable investments include the UAE-based Rivoli Group and KEF Holdings, Oger Telecom and Indian bank ICICI. Jordan Dubai Capital is a US$300 million fund investing exclusively in Jordan. Sector-specific funds include the US$300 million MENA Infrastructure Fund and Ishraq, a US$150 million vehicle to launch Holiday Inn Express hotels across the Middle East.

Information about Dubai International Capital LLC is available at: www.dubaiic.com.

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