Amusement park companies Cedar Fair and Six Flags Entertainment Corp., which is based in Arlington, Texas, announced Nov. 2 that they agreed to combine in a merger-of-equals transaction worth $8 billion, based on their debt and equity values as of Oct. 31.
The merger is expected to close in the first half of 2024 if the deal clears Six Flags shareholders and regulators.
The combined company will operate under the Six Flags name and trade under the ticker symbol FUN on the New York Stock Exchange with headquarters in Charlotte and with significant finance and administrative operations in Sandusky, Ohio, where Cedar Fair is based.
The companies claim the combination will be a leading amusement park operator in the competitive leisure space with an expanded and diversified footprint, a more robust operating model and strong revenue and cash flow generation. It’s expected to come with $200 million in annual synergies, including $120 million of cost savings within two years following the close, and to be accretive to earnings per share for Cedar Fair and Six Flags stockholders within the first 12 months.
According to the deal terms, Cedar Fair unitholders will receive one share of common stock in the new combined company for each unit owned and Six Flags shareholders will receive 0.5800 shares of common stock in the new combined company for each share owned.
After the deal closes, Cedar Fair unitholders will own 51.2 percent and Six Flags shareholders will hold 48.8 percent. One business day before close, Six Flags will declare a special cash dividend including a fixed amount of $1 per outstanding Six Flags share totaling $85 million plus other consideration.
Cedar Fair hired Perella Weinberg Partners as financial advisor and Weil, Gotshal & Manges and Squire Patton Boggs as outside legal counsel. The all New York team from Weil was led by partner Michael J. Aiello and included partner Matt Gilroy and associates Brandon Nesfield, Dorothy Coco, Zain Syedain, Gabriel Rosen and Julia Malave.
Six Flags used Goldman Sachs & Co. and Kirkland & Ellis. The group from Kirkland was led by corporate partners Sarkis Jebejian, Allie Wein and Emily Lichtenheld; debt finance partner Rachael Lichman; capital markets partners Joshua Korff and Tamar Donikyan; and executive compensation partner Stephen Jacobson.
Jebejian advised Six Flags in 2020 on a cooperation agreement with one of its major shareholders, H Partners, with H Partners’ Arik Ruchim joining the board. The hedge fund, which at one time held a 30 percent stake, helped Six Flags emerge from bankruptcy in 2010.
Richard Zimmerman, president and CEO of Cedar Fair, said in a statement that the merger with Six Flags will bring together two of North America’s iconic amusement park companies and create an enhanced financial profile. His counterpart at Six Flags, Selim Bassoul, said by combining their operational models and technology platforms, the companies expect to accelerate their transformation activities and unlock new potential for their parks.
Zimmerman will lead the combined company and Bassoul will serve as executive chairman of the combined company’s board. Cedar Fair CFO Brian Witherow will be CFO and his counterpart at Six Flags, Gary Mick, will be chief integration officer. A newly formed board will consist of 12 directors, six from the Cedar Fair board and six from the Six Flags.