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Theme Parks: Merlin buys into Australia as CDA sells in Europe

Opinion

legoland waterpark california raft on red slide merlin entertainments

Related: Merlin Entertainments Group acquires Sydney Attractions Group from Village Roadshow / Blooloop News /   Compagnie des Alpes – poor weather and economic depression lead to a fall in sales for 2010 / A look at EuroDisney’s 2010 results / EuroDisney’s Strategy to 2030: Doubling Capacity and Eco Tourism / OLC’s 2013 Strategic Plan: Bringing Happiness / Blooloop talks to Great Wolf CEO Kim Schaefer

In the current chilly economic climate where for most companies finance is hard to come by and expansion by licensing is the trend to conserve capital, Merlin yesterday announced that they are acquiring Village Roadshow’s Sydney Attractions Group signifying their intention to strengthen their presence in the Asia Pacific region (as well as everywhere else!).

The A$115million deal includes:merlin entertainments logo

  • Sydney Aquarium,
  • Sydney Wildlife World,  
  • Oceanworld Manly,  
  • Sydney Tower Observation Deck and Sky Walk,
  • Hamilton Island Wildlife Park in Queensland, and
  • Kelly Tarlton’s Antarctic Encounter and Underwater World, in Auckland

Merlin CEO Nick Varney said, "This will be the perfect springboard as we work to continue the roll out of the SEA LIFE, Madame Tussauds, Eye and LEGOLAND brands in the Asia Pacific region, complementing our existing strength in Western Europe and North America."  Merlin’s magic touch has delivered double digit growth (excluding acquisitions) in each of the last 9 years and ensured that they are never short of cash when they spot a bargain.

In contrast the Compagnie des Alpes Group (CDA) announced lacklustre performance from its leisure park operations (39% of it’s business) in its annual report. 

Visitor numbers declined by 6.3% to 9 million visits with EBITDA down 18.1%.  CDA blame poor weather and a depressed economy as well as the continued renovation work at Aqualibi and delays in obtaining permits to introduce dolphins to the public at Safari Africain and Planète Sauvage. 

Unlike Merlin who started their journey with a relatively clean slate, CDA are in the process of tidying up their portfolio.  In keeping with the strategy set out in 2008, the Group is looking to divest parks the following parks which are seen as not core to the business:

  • Bagatelle park, the Aquarium at Saint Malo, compagnie des alpes
  • the Mini Chateaux parks and Val de Loire Aquarium,
  • the Bouveret waterpark in Switzerland,
  • Avonturenpark Hellendoorn in the Netherlands and
  • PleasureWood Hills in the United Kingdom

Talks with the H.I.G. Capital France mutual fund, including Laurent Bruloy former manager of Aqualud du Touquet, to dispose of the seven parks have reached “an advanced stage” and exclusive negotiations are underway until the end of January 2011. 

Cash generated from the sale as well as from refinancing debt in 2010 should give CDA “additional flexibility to carry out a selective and forward looking growth strategy, both organic and through acquisitions” (Dominique Marcel, Chairman and CEO).  Brighter times ahead then in 2011 as CDA looks forward to the integration of Futuroscope and relaunch of the Walabi brand.

On lighter note, Blooloop was (probably unfairly given our complete lack of proficiency in French) tickled to read in the press release from CDA that the Group is looking tomaintain and expand its margins over the medium term by enhancing its products rather than adopting a widespread promotional campaign that is aggressive and abusively effective”.  Fine sentiments indeed but perhaps something was lost in translation!

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