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NEWS
Lego buys Merlin in a deal valuing it at US$7.49bn
POSTED 28 Jun 2019 . BY Tom Walker
Global attractions giant, Merlin Entertainments, has been sold to the family behind toy firm Lego in partnership with two other investors in a deal at 12 x EBITDA.

Merlin is currently the world’s second largest family entertainment company – with Disney being the largest – and it has more than 130 attractions around the world.

The acquisition values Merlin's shares at £4.8bn (€5.35bn, USS$6.1bn), plus a further £1.1bn in debt.

The deal will see a newly created entity, Bidco, take control of 70 per cent of Merlin's shares.

Bidco is owned by Kirkbi – a wholly owned subsidiary of KIRKBI A/S, the private holding and investment company of the Kirk Kristiansen family which manages the LEGO brand – private equity giant Blackstone Core Equity Partners and Canadian pension fund CPPIB.

Kirkbi will own 50 per cent of Bidco, while Blackstone and CPPIB will jointly own the other half.

Kirkbi already owns almost a third (29.58 per cent) of the shares in Merlin. It is anticipated that, upon the acquisition becoming effective, Kirkbi will transfer the Shares to Bidco.

In a statement, Merlin said: "The independent directors of Merlin Entertainments are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Merlin – other than Merlin Shares owned or controlled by Kirkbi.

"The acquisition values the entire issued and to be issued share capital of Merlin at approximately £4.8bn on a fully diluted basis and implies an enterprise value of £5.9bn (US$7.49bn €6.58bn) – a multiple of approximately 12 x Merlin's underlying EBITDA of £494m (US$627m €550m) for the year ended 29 December 2018."

Kirkbi and Blackstone jointly controlled Merlin in the eight years prior to the 2013 public listing, during which time Merlin became the second largest location-based entertainment business globally, behind Disney.

In a short statement, the new owners added: "The consortium recognises that significant, long-term investment is required to ensure the longevity of the existing assets and to drive continued growth for Merlin and its stakeholders."

Merlin, which was floated on the London Stock Exchange in 2013, will have its shares de-listed as part of the deal.

BACKGROUND
The Merlin portfolio has expanded over the decades by acquisition and organic growth. The company acquired the Tussaud's Group attractions in May 2007 via its backer, The Blackstone Group, for £1bn (which was then US$1.9bn), has grown its own brands, based on IPs including Lego Discovery Centres, Shrek, Bear Grylls and Sea Life Centres to create a midway division, and has acquired attractions from other operators.

GLOBAL EXPANSION
It entered the Australian market in 2011 when it purchased the Sydney Attractions Group, which at that time operated the Sydney Aquarium, Sydney Tower and Sydney Wildlife World. It operates 13 attractions in total in Australia and New Zealand.

PARTNERSHIP WITH LEGO
Merlin's partnership with LEGO goes back to July 2005, when Blackstone acquired the Legoland theme parks portfolio from Kirkbi in a £259m deal which included four sites – in Germany, UK, Denmark and US – and a 176-room Legoland hotel adjacent to the theme park in the Danish town of Billund.

In December 2004, Lego had reported that it was unlikely to break even and would consequently be transferring its LEGOLAND parks either partly or wholly to new owners and a separate company, so it could focus on its core play materials business.

MERGER OF LEGO THEME PARKS AND MERLIN
Blackstone merged the business with Merlin Entertainments, which it had acquired the previous month. At the time, the combined businesses welcomed 12m visitors a year.

SALE AND LEASEBACK WITH PRESTBURY
On 17 July 2007, the freeholds of Alton Towers, Thorpe Park, Warwick Castle and Madame Tussauds were sold to Nick Leslau and his investment firm Prestbury under a sale and leaseback agreement.

The company said would be using the money for investment purposes and to pay off outstanding debts. Although the attractions assets are owned by Prestbury, they continue to be operated by Merlin on a renewable 35-year lease.

STOCK MARKET FLOATATION
The company floated on the London Stock Exchange in November 2013, at which time it was valued at £3.5bn. Around 1,700 of Merlin's 10,000 permanent staff were awarded shares on the basis of long service or outstanding contribution

NICK VARNEY
CEO Nick Varney has been at the helm of the business since its inception.

After a stint at Tussauds Group in the 1990s, where he was marketing director of Alton Towers and head of group marketing, he moved to become MD of Vardon Attractions – owner of the Sea Life Centres – and a main board director of Vardon plc.

The move was widely questioned, as Varney had been heir apparent to become CEO of Tussauds, but the decision paid off when Merlin acquired The Tussauds Group.

In 1999, Varney led a management buyout of Vardon Attractions to form Merlin Entertainments and in 2005, initiated the process which led to its acquisition by The Blackstone Group.

In an exclusive interview with Attractions Management, Varney said the secret of the company's success is "Having a great team, an audacious vision, and a lot of luck."

FURTHER INSIGHTS
For further insights into the history of the development and funding of Merlin, read Deloitte's Nigel Bland in Attractions Management from 2014 here.

The Kirk Kristiansen family, which manages the LEGO brand, will become a majority owner of Merlin
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Jobs . News . Products . Magazine
NEWS
Lego buys Merlin in a deal valuing it at US$7.49bn
POSTED 28 Jun 2019 . BY Tom Walker
Global attractions giant, Merlin Entertainments, has been sold to the family behind toy firm Lego in partnership with two other investors in a deal at 12 x EBITDA.

Merlin is currently the world’s second largest family entertainment company – with Disney being the largest – and it has more than 130 attractions around the world.

The acquisition values Merlin's shares at £4.8bn (€5.35bn, USS$6.1bn), plus a further £1.1bn in debt.

The deal will see a newly created entity, Bidco, take control of 70 per cent of Merlin's shares.

Bidco is owned by Kirkbi – a wholly owned subsidiary of KIRKBI A/S, the private holding and investment company of the Kirk Kristiansen family which manages the LEGO brand – private equity giant Blackstone Core Equity Partners and Canadian pension fund CPPIB.

Kirkbi will own 50 per cent of Bidco, while Blackstone and CPPIB will jointly own the other half.

Kirkbi already owns almost a third (29.58 per cent) of the shares in Merlin. It is anticipated that, upon the acquisition becoming effective, Kirkbi will transfer the Shares to Bidco.

In a statement, Merlin said: "The independent directors of Merlin Entertainments are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Merlin – other than Merlin Shares owned or controlled by Kirkbi.

"The acquisition values the entire issued and to be issued share capital of Merlin at approximately £4.8bn on a fully diluted basis and implies an enterprise value of £5.9bn (US$7.49bn €6.58bn) – a multiple of approximately 12 x Merlin's underlying EBITDA of £494m (US$627m €550m) for the year ended 29 December 2018."

Kirkbi and Blackstone jointly controlled Merlin in the eight years prior to the 2013 public listing, during which time Merlin became the second largest location-based entertainment business globally, behind Disney.

In a short statement, the new owners added: "The consortium recognises that significant, long-term investment is required to ensure the longevity of the existing assets and to drive continued growth for Merlin and its stakeholders."

Merlin, which was floated on the London Stock Exchange in 2013, will have its shares de-listed as part of the deal.

BACKGROUND
The Merlin portfolio has expanded over the decades by acquisition and organic growth. The company acquired the Tussaud's Group attractions in May 2007 via its backer, The Blackstone Group, for £1bn (which was then US$1.9bn), has grown its own brands, based on IPs including Lego Discovery Centres, Shrek, Bear Grylls and Sea Life Centres to create a midway division, and has acquired attractions from other operators.

GLOBAL EXPANSION
It entered the Australian market in 2011 when it purchased the Sydney Attractions Group, which at that time operated the Sydney Aquarium, Sydney Tower and Sydney Wildlife World. It operates 13 attractions in total in Australia and New Zealand.

PARTNERSHIP WITH LEGO
Merlin's partnership with LEGO goes back to July 2005, when Blackstone acquired the Legoland theme parks portfolio from Kirkbi in a £259m deal which included four sites – in Germany, UK, Denmark and US – and a 176-room Legoland hotel adjacent to the theme park in the Danish town of Billund.

In December 2004, Lego had reported that it was unlikely to break even and would consequently be transferring its LEGOLAND parks either partly or wholly to new owners and a separate company, so it could focus on its core play materials business.

MERGER OF LEGO THEME PARKS AND MERLIN
Blackstone merged the business with Merlin Entertainments, which it had acquired the previous month. At the time, the combined businesses welcomed 12m visitors a year.

SALE AND LEASEBACK WITH PRESTBURY
On 17 July 2007, the freeholds of Alton Towers, Thorpe Park, Warwick Castle and Madame Tussauds were sold to Nick Leslau and his investment firm Prestbury under a sale and leaseback agreement.

The company said would be using the money for investment purposes and to pay off outstanding debts. Although the attractions assets are owned by Prestbury, they continue to be operated by Merlin on a renewable 35-year lease.

STOCK MARKET FLOATATION
The company floated on the London Stock Exchange in November 2013, at which time it was valued at £3.5bn. Around 1,700 of Merlin's 10,000 permanent staff were awarded shares on the basis of long service or outstanding contribution

NICK VARNEY
CEO Nick Varney has been at the helm of the business since its inception.

After a stint at Tussauds Group in the 1990s, where he was marketing director of Alton Towers and head of group marketing, he moved to become MD of Vardon Attractions – owner of the Sea Life Centres – and a main board director of Vardon plc.

The move was widely questioned, as Varney had been heir apparent to become CEO of Tussauds, but the decision paid off when Merlin acquired The Tussauds Group.

In 1999, Varney led a management buyout of Vardon Attractions to form Merlin Entertainments and in 2005, initiated the process which led to its acquisition by The Blackstone Group.

In an exclusive interview with Attractions Management, Varney said the secret of the company's success is "Having a great team, an audacious vision, and a lot of luck."

FURTHER INSIGHTS
For further insights into the history of the development and funding of Merlin, read Deloitte's Nigel Bland in Attractions Management from 2014 here.

The Kirk Kristiansen family, which manages the LEGO brand, will become a majority owner of Merlin
RELATED STORIES
Peppa Pig theme park potentially in the works as Varney discusses Merlin IP merits


Merlin chief Nick Varney has revealed potential plans for a theme park development dedicated entirely to Peppa Pig.
Upbeat 2018 results for Merlin Entertainments provide impetus for further growth


European attractions operator Merlin Entertainments has reported growth in a number of areas of its business in 2018, including record visitor numbers.
Lego Movie World to open at Legoland Florida in Q2 2019


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How can travelling exhibitions adapt for the future?
Emily Cronin, partnerships manager at the Science Museum Group in the UK, shares insights into evolving business models for touring exhibitions in Spokes, Ecsite’s magazine. [more...]
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Red Raion - Miko and the Spell of the Stone - Movie Trailer
Red Raion is the CGI studio specialized in media based attraction. Find out more...
More videos:
Experience the experience – Polin Waterparks & Pool Systems
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CATALOGUE GALLERY
 

+ More catalogues  
DIRECTORY
+ More directory  
DIARY

16-19 Sep 2019

IAAPA Expo Europe 2019

Paris Expo Porte de Versailles, Paris, France
21-24 Sep 2019

ASTC 2019 Annual Conference

Ontario Science Centre, Toronto, Canada
+ More diary  
 


ADVERTISE . CONTACT US

Leisure Media, Portmill House, Portmill Lane,
Hitchin, Hertfordshire SG5 1DJ Tel: +44 (0)1462 431385

©Cybertrek 2019

ABOUT LEISURE MEDIA
LEISURE MEDIA MAGAZINES
LEISURE MEDIA HANDBOOKS
LEISURE MEDIA WEBSITES
LEISURE MEDIA PRODUCT SEARCH
ATTRACTIONS MANAGEMENT NEWS
ATTRACTIONS HANDBOOK
PRINT SUBSCRIPTIONS
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