Visitors show their reaction to a ride down the Loch Ness Monster at Busch Gardens in Williamsburg, Va., one of 10 theme parks sold to the Blackstone Group, New York investors.
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Shamu, meet your new parents. Anheuser-Busch InBev said yesterday 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 yesterday, 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 such as taking pictures with characters, said David Miller, an analyst with Caris & Co.
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 such as 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 Mr. 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 about $1.37 billion. The parent company has not included the unit's quarterly performance in its results this year.
The whale and its partner performing at SeaWorld in San Diego will have new bosses as a Belgian firm purchases 10 theme parks previously owned by United States brewer Anheuser-Busch