Sandusky, OH: In an effort to bolster its position in the amusement-park market, independently owned Cedar Fair LP has bought Paramount Parks from CBS Corporation. Investor relations are touting the company's stability.
The five-park deal, estimated at $1.24 billion, sets Cedar Fair up to be the second-largest park operator in North America after Disney, said Patrick Gallagher, SVP of Edward Howard & Co., the client's Cleveland-based AOR, which handles its IR.
He said the investor message is that the acquisitions add long-term viability to "a safe investment" through diversification.
Gallagher said that although Cedar Fair's recent public debt ratings fell below investor grade, they're regarded as stable and in line with company expectations. He added that picking up the parks was the "opportunity of a generation. Investors need to take the long-term view that this is going to pay off. [Cedar Fair] is much more leveraged now."
Stacy Frole, Cedar Fair IR director, said the acquisitions are a "unique opportunity to geographically diversify our portfolio." Previously, two of its 12 properties contributed 80% of revenue, she noted. "Now, no park will contribute more than 25%," and overall attendance should double, from 12.5 million to 25 million visitors annually.