Six Flags Sells Seven Parks

[65skylark]

Included in the sale is Wild Waves Enchanted Village in Tacoma. Hopefully the new owners will put a little more TLC into this park! Oh, and Magic Mountain is NOT part of the sale.

Details here.

Six Flags Agrees to Sell Seven Parks for $312 Million
Thursday January 11, 8:40 am ET

Six Flags Magic Mountain and Hurricane Harbor in Valencia, CA Excluded from Sale
PARC 7F - Operations Corporation Will Purchase and Operate the Seven Parks; Financing Committed by CNL Income Properties Inc.


NEW YORK, Jan. 11 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX - News) announced today that it has entered into an agreement to sell three of its water parks and four of its theme parks to PARC 7F-Operations Corporation (PARC) of Jacksonville, FL for $312 million, consisting of $275 million in cash and a note receivable for $37 million. The seven parks are: Six Flags Darien Lake in Buffalo, NY; Six Flags Elitch Gardens in Denver, CO; Frontier City and the White Water Bay water park in Oklahoma City, OK; SplashTown in Houston, TX; Waterworld USA in Concord, CA; and Wild Waves and Enchanted Village in Seattle, WA. The seven parks are estimated to have generated approximately $30 million of Park EBITDA(1) and 3.6 million of attendance in 2006.

Six Flags Magic Mountain and the adjacent Hurricane Harbor water park in Valencia, CA are not included in this transaction and will be fully operational and open for business in 2007 and beyond.

"We're pleased with the sale price for this portfolio of parks, particularly since we were able to retain the Magic Mountain parks," said Mark Shapiro, Six Flags President and CEO. "This transaction confirms the value inherent in our major market branded parks."

The disposition of these seven parks is a key component of the Company's overall strategy to reduce debt and enhance operational and financial flexiblity. Company management stated earlier this year that its intent was to reduce debt by several hundred million dollars over the next several years. The agreement announced today, combined with the June 2006 sale of the land underlying its Houston AstroWorld theme park for $77 million, will result in gross cash proceeds of $352 million for debt reduction.

In their most recent operating years, the seven parks to be sold and the Houston AstroWorld park contributed approximately $35 million(2) of Park EBITDA, implying a valuation multiple of approximately 11 times the combined Park EBITDA.

"My new management team had several key priorities for Six Flags in 2006: transitioning our brand to attract families; cleaning up the parks; reducing capital expenditures; establishing a Corporate Alliances department to forge sponsorship and marketing partnerships with major consumer brands; increasing guest spending; and selling assets as a means to reduce the company's debt," said Shapiro. "With this announcement, all those steps are in full swing and we now have our agenda focused squarely on the 2007 season. A targeted increase in our media spend and our strong new entertainment alliances have us poised to realize attendance gains, making for a successful 2007 season."

The Company noted that obligations with respect to 2007 season passes and any committed park events, including group bookings and the previously announced Dream Nite promotion, will continue to be fulfilled under the new park ownership. Although the two Six Flags-branded parks involved in the sale, Darien Lake in Buffalo, NY and Elitch Gardens in Denver, CO, will no longer carry the Six Flags brand under the new ownership, any 2007 season passes purchased at either of those parks will continue to be honored at all Six Flags branded parks throughout the 2007 season.

As part of the arrangements for the acquisition, PARC will simultaneously sell the parks to CNL Income Properties Inc. (CNL), a Florida-based real estate investment trust, and lease back the parks from CNL pursuant to long- term leases. The sale is subject to satisfaction of customary closing conditions, including clearance under the Hart-Scott-Rodino Act and receipt of necessary third-party consents. The transaction is expected to be completed in March 2007.

The Company will conduct a call with analysts and investors on Friday, January 12, 2007 at 12:00 pm EST to discuss the transaction and revise its 2007 guidance to reflect the sale transaction. The teleconference will be broadcast live to interested parties as a listen-only Webcast on investors.sixflags.com/.

[skinnyguy]

I knew they wouldn't sell SFMM...that never sat well with me ever since they made the announcement. It never made any logical sense.

[Bud Parsley]

So..........................

Was the Magic Mountain hooplah just media hype or were they actually seriously considering it?

Again, I say it was just a brilliant marketing move...gets people thinking about the park, why it is important to their community, and what they can do to keep business coming.

[65skylark]

In another interesting move, it seems Magic Mountain is set to lose two roller coasters!

It seems some peaple have been getting e-mails from the park stating that Flashback and Psyclone (by far the two worst coasters in that park) will be dismanteled to alow for future expansion. The official Six Flags Magic Mountain web site seems to confirm this by now listing only 15 roller coasters (it used to say 17) and has removed all links (except for the drop down ride menu) to both roller coasters.

I must say I am a little surprised by Psyclone but Flashback is long overdue to be put to rest. I think this is a great move by Six Flags and actually backs up what Shapiro has been saying about quality over quantity.

Could the area in the back of the park where Pcyclone is be used for the rumored Thomas The Train themed area?

[skinnyguy]

In response to Bud, I say it was all a big publicity/media stunt.

I do think it's interesting that they're taking two coasters out. That is definitely a step in a very different direction since they've always seemed to be in this big race with CP for having the most coasters, and now with this, it seems they're stepping down from that to focus on other things. I think this is good.

Any ideas on where the two coasters are going to be sent off to? Hopefully Silverwood DOESN'T buy one of them.

[65skylark]

I think both of those coasters are going directly into the scrap pile.

[skinnyguy]

^Good ridance! I never really liked either of them anyway.

In other six flags news, I saw on screamscape a little while ago that they might be re-visiting the concept of a no re-entry policy. I think this would be really dumb if they actually do it.

Thoughts?

[65skylark]

It just goes to show, that while I'm sure Shapiro is a very good buisiness man, he and his team know little about running a theme park. On paper it may look good to have a no re-entry policy. Make people stay in the park, therefore forcing them to buy park food. Profits go up, all is good.

In reality, many families (mine included) go to theme parks on a budget. Sometimes bringing your own food and snacks can be the difference between going or not going. And "families" are going to be the most likely to want to leave a park and re-enter. Shapiro has preached nothing BUT family sense he took over.

Another thing that shows to me Shapiro's lack of theme park experience and knowlege, is that there are many other reasons besides eating a cheapeer meal, that you may want to leave a park. I know, myself, I like to be able to go back to the car as it gets later in the evening to get a hoodie or jacket if it cools down. I've even been known to hit the car for a short nap on some of our longer road trips where you just get worn down after many days in a row of being on the go. Also with youger children (again the family theme here) you may need to head back to the hotel for the middle part of the day just because your kids are getting cranky and need a nap.

These are only some of the many reasons a no re-entry policy is a bad idea. Add 15 dollars for parking (Disney does not even charge that much) and you have a management team that has done very little, so far, to improve on anything. Selling off seven lower end parks to reduce a ton of debt was a sound buisiness decision any buisiness person could see needed to be made. No theme park experience needed for that one. Other than that, Shapiro and company have done little to make me think they have any idea what they are doing.

Time will tell. Six Flags was so run into the ground that no one would have been able to turn that thing around in a years time. I still hold out hope that they can do it. But it will take time.

[skinnyguy]

^Couldn't have said it any better myself. I hope against hope that they choose not to impliment this policy.