Private investors buy Busch theme parks for $2.3B
Shamu, meet your new parents. Anheuser-Busch InBev said Wednesday it will sell its 10 theme parks across the country, including the three SeaWorlds and two Busch Gardens, to private equity firm Blackstone Group for at least $2.3 billion.
The world’s largest brewer, based in Belgium, has been shedding assets to help pay for the $52 billion takeover of St. Louis-based Anheuser-Busch that formed the company last year.
The two sides confirmed the deal Wednesday, saying Blackstone will pay $2.3 billion in cash for Busch Entertainment Corp. and give Anheuser-Busch InBev the right to up to $400 million of Blackstone’s initial returns.
New York-based Blackstone’s other investments include Universal Studios Orlando and Madame Tussauds wax museums so the theme parks fit into its portfolio.
Some amusement park operators are showing signs of stress amid the recession. Six Flags Inc., saddled by debt, is in bankruptcy court protection. And the nation’s top amusement park operator, The Walt Disney Co., is offering numerous discounts and specials to keep visitors coming — and spending money.
Blackstone sees opportunity investing in media and entertainment businesses, said Michael Chae, senior managing director at Blackstone.
“We are delighted to be investing in a company with such iconic brands, irreplaceable assets and strong growth prospects,” he said. The company declined to detail its plans.
Blackstone probably will try to get visitors to spend more at the parks by starting to charge money for extras like taking pictures with characters, said David Miller, an analyst with Caris & Co.
Anheuser-Busch InBev CEO Carlos Brito said last year as InBev took over Anheuser-Busch that the company would sell $7 billion in nonessential assets to help pay for the deal. The company has sold its Irish and Scottish businesses, factories and some interests in Asia.
Brito said in a statement Wednesday that the theme parks perform well but are not a focus for the brewer.
Busch Entertainment’s 10 parks include SeaWorlds in Florida, Texas and California; Busch Gardens in Florida and Virginia and others such as Sesame Place and Adventure Island. Busch is considered the second-largest U.S. entertainment park operator with about 25 million visitors a year and 25,000 employees.
The company benefits from a diverse geography, including parks in vacation destinations like San Diego and in regional hubs. That means people can make spur-of-the-moment decisions to visit them and don’t have to plan a full vacation, which they’re less likely to do during the recession, analyst Miller said.
“You don’t need an airline reservation or a hotel reservation. You get in your car. You grab your kid and say let’s go to Busch Gardens,” he said.
It’s not clear how much the business is worth. According to Anheuser-Busch InBev’s annual report from 2008, the entertainment unit had pro-forma revenue of 932 million euros, or about $1.37 billion. The parent company has not included the unit’s quarterly performance in its results this year.
Busch Entertainment CEO Jim Atchison said the company looks forward to growing the business under its new owners and praised their experience in entertainment. Park guests and employees should expect to see only improvements, he said.
“We’re very committed to growth, to maintaining the quality of the parks, the investments of the park,” he told The Associated Press.
The brewer of top-selling Bud Light started Busch Gardens in 1959 at the Tampa brewery, Atchison said, first adding animals and eventually a full-fledged theme park.
Atchison said it was bittersweet that Anheuser-Busch would no longer be the company’s owner, especially for him because he started his career parking cars at the Tampa Busch Gardens as a teenager.
Busch Entertainment, which will add some clerical and other jobs to perform tasks its parent had covered, will maintain its headquarters in Orlando, Fla., and — for now — the Busch name, Atchison said.
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